NTP returning future time

I've noticed the time on a Linux server I'm maintaining is set to 8 hours in the future.

I thought this was weird so I checked ntpd was on, and it is.

I thought this was even weirder so I checked the timezone,

$ ls -lah /etc/localtime
/etc/localtime -> /usr/share/zoneinfo/Australia/Brisbane

hmmm...

$ ntpdate -q 0.au.pool.ntp.org
server 119.148.81.6, stratum 2, offset -28768.189322, delay 0.06355
server 203.161.129.2, stratum 3, offset -28768.185683, delay 0.03165
server 202.158.218.239, stratum 3, offset -28768.187015, delay 0.04909
 8 Sep 19:49:49 ntpdate[16434]: step time server 119.148.81.6 offset -28768.189322 sec

uhh... totally wrong. I figured there might be some kind of catch in ntpd to not actually update the server time if it differed too greatly from the local time, so i set it manually:

$ date 090811492010
Wed Sep 8 11:45:00 EST 2010

Then ran date again to see what happened:

$ date
Wed Sep 8 11:44:47 EST 2010

It went backwards 13 seconds! I figured ntpd had ran successfully and adjusted the server time, being 13 seconds incorrect.

Subsequent checking of the date with ntpdate -q, though, still said 19:49 for the correct time, and as such ntpd reset the time to 19:49 within a matter of moments..

Does anyone know what I've done wrong?

Is this a dedicated virtual server, or a virtualized one? Some virtualization software can have a desync between the clocks on the host and guest OSs.