How does AC current flow in an open circuit? In common house hold wiring we have the hot lead, neutral and ground.
If the hot lead in electrical wiring contacts earth ground (perhaps though a short circuit in the chassis of a device) then the current shorted to earth. This however doesn't appear to me to be a complete closed circuit. My intuition tells me current should flow, but my academic knowledge says that it shouldn't because we have an open circuit condition. So how does the current therefor flow?
I've heard the argument that because the neutral wire is earth grounded at the service panel (aka breaker box), that it is actually a complete circuit. So in my example, current travels though earth and back up into neutral at the service panel. 
However IF at the service panel, the neutral was not connected to earth ground (so the neutral left floating), then we definitely don't have a closed circuit, yet my intuition tells me somehow current would still flow into earth in a short circuit condition.
I've looked up a similar question like this here on stackexchange. In that question, current flow is examined between earth and mars in an incomplete circuit. In that scenario the answer looked at the planets somewhat like two capacitor plates. That would not apply in my question however 
 A: To start with one could have an ac current never grounded anywhere , for a household generator for example. The reason one grounds at the generator is for safety so the ground can pick up any miss chance, as it is a practically infinite sink for electrons. Only one of the two lines can be grounded of course :). 
It was found though that due to capacitences  the ac  neutral even though it starts with zero at the ground ends up in households with some voltage difference dependingon the distances traveled from the last grounding of the supply circuit. I have measured up to 45 volts  to the ground difference on the neutral in the 220 we have here.
The household is grounded to some water pipes etc for the same reason it starts grounded, so the outside of appliances is safe for the casual user from small accidents. 

However IF at the service panel, the neutral was not connected to earth ground (so the neutral left floating), then we definitely don't have a closed circuit, yet my intuition tells me somehow current would still flow into earth in a short circuit condition.

Sure, due to the infinite sink for electrons of the earth of course the circuit will close to the ground whether the short circuit was from the neutral ( floating) or the live, both would be live in this hypothesis. Grounding at the factory/generator is for safety of use, reduces probabilities of fatal accidents,  and in order to assure a stable voltage difference to the user, not floating where then the accidental shorts would be more dangerous. As it arrives floating a bit by the effective circuit the current traverses to the homes, houses have to be grounded again for safety reasons. Having one of the two wires close to ground voltage  reduces probabilities of accident by 1/2
A: There is a LOT of capacitive coupling between the neutral wire and ground even if a DC current cannot flow. And we are talking about AC here.
