WP is 3.2.1, and my blog is set at US Central time (GMT -6), although it was accidentally set at GMT before. In both cases it created the event today (July 21) at what it thought was the local time. This happens whether I use the Month or the Week view to create the event. It puts the starting and ending time at the current time.
It looks like I can drag things and change the time on the Weekly view. But as soon as I double-click the event and hit Update – even if I change nothing – it jumps back to the current date and time.