I didn't want to have to resort to edible paper...do you guys have any suggestions? Thanks!!!

If you have experience with a spray gun...That would be cool if you could spray the blue faded part. It would take some practice.
good luck

I would say to cut the letters out of fondant and then airbrush the squares.

I would do more with the letters, like doing TRICORP in a 3 dimentional

you could try handpainting the squares, like a sponge painting effect, fading into white...
i would try a sample piece first...
HTH
let us know what you finally decide

Brush embroidery might work for the faded squares.

I would make a triangle our of cardstock to put down to block out the white then make a square stencil with the sides the same length as the base of the triangle. Use that to fill in the blue part in the middle around the triangle by sponging the color. When you are done with all three squares remove the triangle and you should have the same effect. Use the square stencil for the outer squares as well with darker color to the outsides.