I just want to chime in to report similar problems in Tustin, California, USA. Whenever my wife and I are in the city of Tustin, our Droid Eris phones show that we are in Xuzhou, Jiangsu, China. That is shown as the "current location" in the HTC clock app, HTC weather app, and Google Maps. And the time on the phone (including the clock in the Verizon notification bar) jumps 16 hours ahead of our local time, to coincide with the local time in Xuzhou. This happens with or without GPS enabled.
I noticed a pattern, though. Check out the latitude and longitude pairs for the two cities:
Tustin, CA, USA = 34?N, 117?W
Xuzhou, China = 34?N, 117?E
So for some reason, the phone thinks we're in east longitude instead of west whenever we're in Tustin.
For other people having this problem, is there a similar correlation between the latitude and longitude of your actual location and the latitude and longitude of the incorrect location shown on your phone?
Lat - Long Finder: This page helps you find Latitude and Longitude