You did not mention how the joint was prepared, but it is a good guess it was ground to bright metal by grinding. Grinding can induce a localized magnetic field that can ruin a good day.
I suggest demagnetizing the base metal. The residual field sounds as if it is relatively weak so a couple of sharp raps with a 2-pound hammer might be sufficient to demagnetize the work piece. If that does not work, you can possibly demagnetize it using the arc-welding machine. You are most likely using a DC machine so you will have to use a "step down" technique. This has been addressed in previous threads. A quick search on "Demagnetizing" should result in several threads on the subject. You can try this one:
http://www.aws.org/cgi-bin/mwf/topic_show.pl?pid=121249;hl=arc%20blowSteel retains its magnetic properties up to the Curie temperature. That is on the order of the lower temperature of transformation, i.e., when the steel starts to see "red heat.” Those temperatures are well above the normal preheat temperatures recommended for most steels.
If you are working with relative thin materials and you have a magnetic yoke available, you can use the AC yoke typically used for magnetic particle testing to demagnetize the work piece. If you have an AC magnetic yoke simply place it on the area you wish to demagnetize and slowly move it away from the part while turning it (the yoke) side to side with a twist of the wrist as you draw it further from the work piece. Standard practice is to keep the yoke energized until you are about 3 feet from the part being demagnetized. Repeat the process several times moving from one position to the next position approximately 6 inches from the previous position until you have done the entire joint. Again this will work if the part is small or thin or if the field is weak (which seems to fit your situation).
Best regards - Al