Well it is exactly a month since Panoramio API has started to misbehave after a major site maintenace, although they fixed that particular bug quite fast, still the API it is not working properly so I checked if their own application work properly. To my surprise it seems their own applications are also affected which quite strange for a Google company, see my post at their forum http://www.panoramio.com/forum/viewtopic.php?p=249432#249432
" Photos shown in world map ( http://www.panoramio.com/map/) do not correspond to the coordinates of the map but include photos from very distant places not shown in the map - this is particular true on low zoom levels of the map."
they requested some examples which I also posted there with some explanations.
Still waiting for an answer.