[ttwwmm]

The use of <(..) is really weird here... why not just pipe dns-sd to the while loop?

    dns-sd | while read -r line ; do
        ...
    done

Sure, you won't be able to accumulate the output for the trap, but you shouldn't need to---this is stream processing!

Consider replacing the while loop with awk. This sort of thing is exactly what awk is good at:

    BEGIN { FS = " "; count = 0; }
    NR > 5 {
        count++
        print
        if ($3 != "3") { exit; }
    }
    END { printf("%d hosts found\n", count); }

You could also do it with GNU sed (you'll need the q or Q command for early exit, and that's a GNU extension---no idea if it's available on OS X).

[pstadler]

This will stay in the loop if there's no output or if no flag == 3 is received.