2003/2007 Problem With InStr, Replace, And Len

I have run into a brick wall with InStr, Replace, and Len. I take the data from the active cell (formatted as text). I need to cleanup the data and do further massaging of it. In testing cleanup code, I get behavoirs and results I simply don't understand and can't figure out from hours searching forums many places.

The following simplified example commented code can be cut/pasted into a new spreadsheet module and should be self-explanatory. Example data is in the comments. Data is entered by multiple users and multiple sources. Therefore there is no control over the input quality so extraneous characters and multiple repeated periods and spaces can show up anywhere.