I had similar problem: When synchronization was enabled, gnome clock applet
shows time in UTC even I have set Europe/Prague zone and "show UTC" was not 
checked... When I have adjusted time manualy, it does not change the time at 
all, I must disable synchronization and then it works.. but when I enable 
synchronization, the UTC was back... then I have solved this problem by this:
# rm /etc/localtime && ln -s /usr/share/zoneinfo/Europe/Prague /etc/localtime
...but this is an workaround and should be fixed properly..

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clock applet shows UTC time not timezone time when NTP used
https://launchpad.net/bugs/15514

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