Yes, that is what is so puzzling. You should have had a different result if you could flash out of it. But you can't seem to. So everytime you go back to WM5 do u use the AKU2 ROM? Seems to me that VZW disabled WIFI initially when they introduced the phone many moons ago. Did you ever try the AKU3.3 VZW WM5 upgrade?
http://www.pcdphones.com/uts_downloads.aspx
I can't understand why the card won't work unless the slot is dead. I also read about turning off the phone radio and clicking the card in and out to get it to activate.