What is "lens sep"? It's when two cemented elements begin to separate.
What does it look like? Like a patch of oil when the sunlight hits it. There will be an iridescent rainbow colored area, usually along the edges. The shape varies, but it's typically crescent or wave-like.
What does it affect? Due to the reflection is causes, it can increase flare and reduce contrast.
Can it be repaired? It is usually not cost effective to have it repaired. It is fairly labor intensive and expensive to fix.
How does it happen? Lens separation typically happens in older lenses. It can be caused by the breakdown of the cement or glue over time. Not storing lenses properly and leaving them in very hot conditions can contribute to the break down. Once the sep has started, it will continue to worsen over time. Sep can also occur in prisms.
Anything else? All lenses that come in to KEH and have "sep" are automatically graded as UG. Also, the coloration in sep should not be confused with an overall rainbow-ish reflection on a front element of a lens. Some lenses (again, mostly older) have a coating that can appear rainbow when moved in the light. If it's even and covers the entire lens, it probably isn't sep. If it's a visible patch on a part of the lens, then it probably is sep.