This event takes place all day on 08/26, in my neighborhood, in my time zone.
event page: https://www.facebook.com/events/483089031719027/
screenshot of event in facebook: http://cl.ly/image/1r3Z2P1l2K2S
screenshot of event in ical: http://cl.ly/image/3W3P1K0J2X17
.ics export from facebook http://cl.ly/1a3d2b3L1P0V
inside the .ics file:
DTSTART:20120825
Update
A friend exported the .ics from the same event and got this one, which has the correct
DTSTART:20120826
http://cl.ly/3w1h2J034717
Bug is weirder than I thought.