Bit of a problem with Inset.

 From:  Michael Gibson
5508.5 In reply to 5508.1 
And when you get something that looks weird like that with surface pieces kind of "leaking" out into hole areas or past outer boundaries, it means that the geometry has some kind of mangled trim boundaries, either some edges of the boundary missing, or mangled in some way like with pieces crossing over each other or things like that.

In this case it's some bug in inset or in something that inset uses that is making the mangled result. I'll put it on my list to see if it's possible for me to fix it up or at least figure out which area the bug is at.

- Michael