From reading the thread there's some confusion about what the SUPL server actually does, and how the other location levels are implemented. SUPL doesn't all of a sudden make your lock more accurate, it simply improves the time it takes for the GPS chipset to achieve a lock. Now in our case, the performance of the GPS without assistance data is miserable, which might be why people are confused about AGPS. Anyway, for reference, and to explain why some people have poor accuracy (caused by a lack of SUPL data imho):

There are 4 levels of accuracy you can ask for from the location framework. These are:

LOCATION_METHOD_CWP
LOCATION_METHOD_ACWP
LOCATION_METHOD_GNSS
LOCATION_METHOD_AGNSS

Their description in rough terms:

The first, Complimentary Wireless Position, uses data provided to the phone by the GSM protocol so that it knows which country the cell/service provider lives in. This method does not require any data transfer (over and above the low level GSM stuff that makes your phone work at all).

ACWP (Assisted Complimentary Wireless Position) lets your phone query the base station it's connected to and has it return a location. This requires a small amount of data transfer.

GNSS (Global Navigation Satellite System) uses the GPS to obtain a fix. In this mode AGPS is not used, and therefore no data transfer is required, but it will probably take an age and you will need a clear view of the sky.

AGNSS (Assisted Global Navigation Satellite System) in this mode AGPS is used (i.e. the SUPL server is queried for ephemeris and almanac data for the current location as provided by the ACWP method, these data are then used to prime the GPS chipset so it gets a lock quicker).


So, from what we see here, the Google SUPL server is no longer providing us with information for whatever reason, so the location framework will fall back to using the GPS with no assistance (which means it make take some number of aeons to get a fix), and in the meantime you are just seeing your location as provided by the local cell towers (i.e. ACWP)