Where did this file come from I started up Disk Utility to mount an external HD and noticed an image file decryptedFile.dmg

Any idea where this file could have come from ls -l@ shows:-

-rw-r--r--@ 1 root  wheel  15643651 17 Feb 11:21 /var/folders/zz/zyxvpxvq6csfxvn_n0000000000000/T/decryptedFile.dmg
    com.apple.diskimages.recentcksum          81 




It appears the download was Flash Player. I never use this, but it is not my computer, and apparently Flash had automatic updates (and other undesirable privacy breaches) enabled. (I am very reluctant to open any .dmg I haven't actually downloaded.
Have you installed Flash Player recently? If so, it's just a harmless leftover. If not, it could be part of the Flashback Trojan.

Also keep in mind that programs like Google Chrome embed flash player, so you are correct to not trust dmg you don't really want to install. More digging might be needed if you don't want to make a backup and then just delete the files and see if/when they reappear.