Console cursor alignment issue

Binary package hint: konsole

#lsb_release -a
Distributor ID: Ubuntu
Description: Ubuntu 7.10
Release: 7.10
Codename: gutsy

#uname -r
2.6.22-14-generic

Applications:
Problem is visible on both Gnome terminal 2.18.2 and Konsole 1.6.6 on KDE 3.5.8

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Hardware:
I've seen this on two systems running Ubuntu 7.10, IBM Thinkpad T41p, and a IBM Thinkpad T42p, on both integrated and USB keyboards.
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Problem description:
Cursor misaligns by 4 characters whenever <HOME> is pressed. Thereafter, alignment remains off, almost as thought the text were shifted over 4 bytes, although visually it appears to be in its original location. This makes editing a past command very difficult. Here is text copied directly from the command line:

1. Original command:
#echo test text
test text

2. Press up arrow, then <HOME> then "1":
#echo1 test text
bash: 1echo: command not found

The 1 appears at the end of 'echo', but is obviously at the start of the command. This appears to be a buffer alignment issue, somewhere outside of (below) the actual console app. It seemed to appear in Ubuntu 7.10, as I had been running 7.04 previously and never saw the problem.