Yes, it's jacked. You're not doing anything wrong.
The free space and last two drives are all part of the same partition. Given that this isn't working I would suspect something is up with one of the extended boot records in that partition. It's also likely that the free space is not physically located where the diagram shows it (if the first EBR were screwed up you wouldn't see the rest of the drives in the partition).
Someone is going to need to go in with diskprobe and check your partition table, EBRs and boot sectors to be sure all the locations and sizes are correct. Unfortunately this is beyond what can be done during a back-and-forth in a forum.
You should have X days of free tech support from Microsoft or X number of free incidents that came with your Vista ultimate. Now would be the time to use them. Call MS, when the call router is getting you to the correct team just let them know you want to talk to the "Setup" team. Those are the guys that handle disk issues like this. I've seen far worse when I was on that team so they should be able to handle it just fine. EBRs are a bit of a hassle to work with and fix (they're akin to a linked list) but it's just a hassle, not impossible. They can use an Easy Assist session to diskprobe or perhaps walk you through it over the phone.
One possibility that isn't completely without risk is to convert the disk to dynamic. The conversion process will read the partition table, EBRs and boot sectors when it builds the LDM database at the end of the drive. Once the conversion is complete the problem may get left behind. If I had good backups (and no diskprobe kung fu ) I would give this a shot.
If you have free tech support though, go that route. They'll fix it I'm quite sure. If you don't mind, PM me the case number. I'd be interested to see the notes on what exactly they find.