My first thought is still that it's a bad bit of basswood. I know in general wood can be affected by being dried too quickly or being stored for too long in the wrong conditions. If it was mislabeled I honestly think it would have been an accidental mislabelling somewhere along the line.
Love the mental image of you fighting boy scouts for the pine blocks Can't see your pics embedded though (but I can open them in a different tab to see them)
Oh, and I didn't mean to imply I thought you were cutting hard against the grain - I was trying to suggest I thought that was actually unlikely! And also sorry as I wasn't meaning to suggest you should know what basswood is like to carve - was just trying to let you know it shouldn't be the struggle yours has been.