It's definately a GPS issue. The GPS was still sending out data, it was just inaccurate. NetStumbler would have reported a GPS Timeout error if there is a cable problem or the GPS had stopped sending data entirely. The log also would have shown a Lat. and Long. of all zeros it that was the case.
It depends on the GPS brand and model, but I've had GPS units do this kind of behavior under two circumstances:
- Satellite signal lost.
- Battery voltage is low.
In either case the GPS reports the last position data it had, and that's all it does.
The cures are making sure you have a good sky view for the GPS (ie. up near the windshield), and fresh batteries (or a voltage converter) for the car.