Today, I returned to find the item at the same price I left it so I place another bid--and once again, my bid was too low and a new price was shown. Could it have been strange luck? Nope. I tested a few more times, but instead of entering the default suggested bid, I entered a custom bid and noted the number. Each time, my bid was "too low" and the new current bid was exactly 5% above what I entered. So it's definitely my bids that are bidding it up, but it still won't recognize that I am the highest bidder. :(
Edit: the other possibility of course is that the AH is simply displaying the wrong bid information to me and the current bid is really much higher than it appears.