The problem is solved by adding window.jQuery to the initial test and assignment at the top of the jquery.js file. The issue came about because the anonymous function module that surrounds the jquery code was allowing the

var jQuery = ..

that was later in the file to define a local version of jQuery. So the initial test

if (typeof jQuery != 'undefined')

was failing since it was using the local scope and it really was undefined so far. Adding the global for both instances solved the problem.

One thing to note from the test case is jQuery.noConflict() returns the "new" jQuery, not the old one.

Fixed in SVN rev [3701].