I've already reported this to Lynn, but I thought I'd get it into the archives...
 
Preparing for Physical Inventory last night, I ran SM-J-C (both levels, version B) before freezing inventory. When printing the value for our multiple locations, I noticed that the blank location (which we do not use) had a huge, negative inventory value (about $2.6 million) and that our main location had about $3.6 million in value when it should have been just under one million. Looking at individual item UOH showed huge negative quantities in the blank location and huge positive quantities in the main inventory location. Together the two balanced out to about what should have been on hand.
 
Tracing the problem banck into the INVTXN table, I found 28,670 "Monthly Consolidation" transactions that had no location. Ouch. I had run the consolidation routine (UT-K-E) back at the end of April, but the problem did not affect anything until I reconciled the inventory transactions.
 
Take away: if you have multiple locations and you run UT-K-E, check your results carefully.
 
 
 
BTW, to fix this, I restored from my backup, then added in the 28,670 locations (with a SQL UPDATE ) and then reran SM-J-C (plus, since I had already frozen inventory, I had to refreeze).

Yes, SM-J-C will recreate any location that used to exist if there are still old records of it in your INVTXN table. In your case, you could stop that from happening by changing all of the LOC fields in INVTXN to a blank. It is more complicated for anyone who needs to still have multiple locations, but wants to get rid of some. I need to figure a way to consolidate locations without making the old transactions into a mess that hoses UOH when I run SM-J-C the next time  
 
However, this glitch in the consolidation program caused a nightmarish mess where thousands of parts had UOH transferred between locations. Yech!