No, I don't think the BB is defective.
Where are you loading "Loader" from - I don't recall seeing "current version and available version" when using Loader.exe (I used it earlier this evening).
Let's rerun the steps.
Download the OS (you are downloading 22.214.171.124, which is the application version)
Install the OS onto your PC
Locate and delete ALL COPIES of VENDOR.XML on your PC C: drive
Connect your BB to your PC - make sure Desktop Manager is NOT started
Go into c:\program files\common files\research in motion\apploader and run loader