I was having the exact same problem with a plugin that needs to access a database separate from the main wordpress db.
While the information you provide will help me get the project moving again, it seems that this may indicate a flaw in the wpdb class.
Because I thought it would make for a cleaner implementation, I access the wp database via the wpdb class. Everything was peachy until I started working on this plugin that needed to access an additional database.
WordPress instantiates a wpdb object for database access. My plugins use that one to access the wordpress database. My plugin instantiates another wpdb object to access another database. This *should* work fine, according to the wp docs I have read.
The problem is that, as you described in your original post, once you access the second database, *both* wpdb objects seem to reference that database!
I'm kinda new here, so I guess I'll check the references in this thread, and see if there is a bug report that needs to be filed or commented on.
Thanks again, Zaine, for posting this topic! It's nice to know I'm not crazy after all (at least when it comes to wp databases!)