Patch created with "Create Patch" fails to apply using "Apply Patch"

I've been having problems applying a patch that was created by
TortoiseSVN. The error message from TortoiseMerge is similar to the
following:

The patch seems outdated! The file line
line_4
and the patch line
line_2
do not match!

I've created and attached files which are capable of reproducing the
error. They are as follows: the original file(test.txt), the modified
version(test_v2.txt), and the patch file(test.patch) generated from
the using "Create Patch". If I apply the patch using the standard
patch application provided with cygwin, it applies with a fuzz of 2
and messages indicating hunk #2 succeeded at 7 (offset 2 lines), with
subsequent hunks succeeding at offsets of -2, 2, -2, 2, -2, etc.

FYI, I am using TortoiseSVN: 1.5.6 build 14908 and tools.

I suspect this is a bug with application used to create the patch
since the patch fails to apply using the standard patch application.

Regards,

David Ellingsworth