A high density 'blue' mode has been observed when operating the Helicon Double Layer Thruster (HDLT) with xenon. Using a Langmuir probe and a retarding field energy analyser (RFEA), the plasma source and exhaust have been characterized at various radio frequency (RF) powers and operating pressures. When operating at low RF powers, the HDLT prototype is shown to be in a capacitively coupled mode. As the RF power is increased, a discrete mode transition occurs over a small RF power range (at about 625 W at 0.45 mTorr) and the plasma inside the source increases in density significantly and changes to a bright white/blue colour. This high density mode exhibits hysteresis, and radial measurements inside the source reveal a centrally peaked profile that is indicative of a helicon wave-sustained discharge. The quality, or Q, factor of the matching box is determined as a function of RF power and is shown to decrease in the high density mode, consistent with the increase in plasma density observed. The xenon exhaust of the HDLT prototype is investigated axially with the Langmuir probe and the RFEA and is shown to follow a Boltzmann expansion with an electron temperature of about 6 eV.