Why Can I get Clicks Outside My Geo-Targeted Area With Google AdWords?

A very important feature of Google AdWords is the ability to target all areas you have defined as your target audience, but just as importantly is not having those outside your coverage area not able to find you.  Pay Per Click is a pay to play game, and throwing away money on a searcher who finds your ad and therefore costs you money without being able to utilize your product/service hurts the program significantly.

In a specific case, I was targeting only the state of Florida.  So to sum up, I only wanted people in Florida to be able to find my ads.  The problem is, my tracking shows a majority of clicks from outside the state, namely New Jersey.  How can this be?  Here's Google's answer:

I. IP Address Does Not Match User's Location- the good old AOL example, where all AOL users have an IP of Virginia, their home base.

II. Target Region Larger Than Expected- this makes no sense.  I have a preset area called a STATE selected.

III. Ad Showing on Location-Specific Queries- technically my ad will still come up when searchers outside the state of Florida specifying Florida in the search query like 'Florida shoe shine'.

IV. Ad Showing on Country-Specific Domain- like point 3, searchers specifying my target area from outside the country will still find my ad.

So to sum up- the geo-targeting is not going to be able to limit the ads as advertised, although for points 3 and 4 seem to still be targeted results.

If you have information outside these 4 Google rep. points- please share.