It seems to be a Google bug. Consider the response from Google to this geocoding call: http://maps.googleapis.com/maps/api/geocode/json?latlng=37.4242731%2C-122.1454809&sensor=true
The coordinate is in Palo Alto, which you can confirm using google map. The response from Google gives me the right street name and street number, even right county, but puts me 40 miles away in South San Francisco. Any ideas why?