I needed to plug PSI(j,Nx+1) = PSI(j,Nx-1) into the SOR equation at the index corresponding to the right end of the channel. So the SOR loop now looks like:
%%% Implimentation of the Successive Over Relaxation Method
for i=1:n;
for ix = 2:Nx-1; % all internal x points
for iy = 2:Ny-1; % all internal y points
PSI(iy,ix) = (1.0-w)*PSI(iy,ix) + w/4.0*(PSI(iy,ix-1) + PSI(iy,ix+1) + PSI(iy-1,ix) + PSI(iy+1,ix));
if ix >= 51 && iy <= 21 % Boundary conditions of rectangle in channel
PSI(iy,ix) = 0;
end
for j=2:Ny-1 % Neumann boundary condition on right end of the channel
PSI(j,Nx) = (1-w)*PSI(j,Nx) + (w/4)*(2*PSI(j,Nx-1) + PSI(j-1,Nx) + PSI(j+1,Nx));
end
end
end
end
and the solution plotted is now: