Lightroom: Local exposure adjustments affect all parts of the image

Edit Subject

LR2 and LR3: Using a local adjustment or graduated filter with an exposure correction, blows out parts of the image that should not be affected. (if they were close to clipping before)

Before:

After:

(Click for larger view)

OSX 10.6.6 on Intel Mac, LR 3.3 (LR2.7 on PPC mac did the same)
"Camera Neutral" DNG profile, Canon 1D3.

"Recovery" slider also not working as it should (higher recovery = more white, less purple in the problem area's in the above example)