Well the bad splice is creating a resistance in series with the load. Remember basic ohms law. V=I*R when the load is disconnected there is no current flowing through the resistor (bad splice) so there is no voltage drop accross it. When the load is applied, current is drawn through the splice (masquerading as a resistor) and it causes the 32 volt, or so, drop that you are seeing.
As for phase B, yes it acts as neutral or, more technically, the grounded conductor. It is what is known as a corner grounded delta service. I have never dealt with one before but, I have heard of them. I didn't think that they were that common any more but, you say it is a fairly new service (5yrs). So, well there it is.
