I still think your phone sees some wifi signal or signals that are mapped incorrectly in the google database. Try grabbing the WiFi Analyzer App and see if you can see any signals around you.
If your phone can't see any signal, it wouldn't have anything to report to google to ask the database where its at except the cell tower. If there was no signal I would expect it to act just like wifi was turned off. Maybe turn wifi on and encase the phone in a metal radio wave shielding box
Having it shoot you all over the world, makes me think it sees something other than the cell tower, reports that to google then gets a bad location because their database is wrong.
Or it could be a bug... but I still guess your phone is seeing something.