Is the problem with toxic Russian "moonshine" that the 'shiners are
selling poison or are they not operating their stills correctly? If
the latter, what distillation error are they making?

This isn't your garden-variety moonshine. Apparently many of the
deaths are attributed to the sale of alcohol that has been
deliberately laced with toxic substances, misrepresented as vodka:

"The crisis has been triggered by counterfeit vodka, which sells for
as little as 70 roubles (£1.40) a bottle. Clearly not interested in
getting repeat customers, unscrupulous businesmen are adulterating it
with ingredients that belong in a garage rather than a bar.

A recent police raid on a warehouse in the town of Voronezh
intercepted a batch of liquor that was about to be passed off as
vodka. Its ingredients included brake fluid, anti-corrosion solution
and cheap eau de cologne. In other cases vodka has been found to
contain window-cleaning fluid, lighter fluid, de-icer, antiseptics,
and cheap aftershave."

Belfast Telegraph
http://www.belfasttelegraph.co.uk/news/story.jsp?story=712128

"A senior Russian government official called for action against
counterfeit alcohol Friday, a news report said, as the death toll from
fake vodka and toxic alcohol substitutes in recent weeks continued to
climb highlighting widespread alcohol abuse in Russia.
  
Officials in the central Voronezh region announced the seizure of 600
tons of hazardous liquids that authorities suspected were intended to
be resold as vodka.

The liquids were cleansing, car window deicing and de-rusting
chemicals that contained 95 percent ethyl spirit..."

Pravda: Russian official calls for action against counterfeit alcohol
as death toll climbs
http://english.pravda.ru/news/russia/27-10-2006/85249-alcohol-0

"Counterfeit vodka laced with toxic household agents has turned
Russia?s national tipple into a deadly cocktail and is killing
Russians by the dozen. Hundreds have died from hepatitis and liver
failure in the past few weeks after swigging the tainted liquor,
alarming lawmakers and forcing the General-Prosecutor to order a
clampdown on illegal alcohol producers...

'From July 1 they (officials) introduced licences for wholesale
deliveries of liquids containing alcohol. In August poisoning from
antiseptics began,' Pavel Shapin, head of the National Alcohol
Association, told Reuters. 'The problem is that people started
drinking antiseptics.' Antiseptics are used for cleaning flesh wounds,
and as medicine are not covered by the new law. Newspaper reports also
say brake fluid, eau de cologne, window cleaning liquid, lighter fuel
and aftershave have also been added to vodka."

Gulf Times: Tainted vodka killing Russians by the dozen
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=115413&version=1&template_id=39&parent_id=21

My Google search strategy:

Google News Search: russian alcohol deaths 
http://news.google.com/news?hl=en&ie=UTF-8&oe=UTF-8&tab=wn&q=russian+alcohol+deaths

Best,
Pink

Excellent and comprehensive answer, Pink, and thank you! I had been
debating with friends that distilling isn't all that complicated and
is unlikely to cause toxins to form simply by virtue of the
distillation process. What surprises me is that there are criminals
who would add these poisons when it really isn't that hard to distill
alcohol. Even a cheap cologne probably costs more than grain alcohol.

24 minutes from post to completion. Wow!

How awful!

This story had passed me by.

Many thanks to Mark & Pink for bringing it to The GA-laxy.

Bryan

How history repeats itself.

My uncle knew a guy who was out in Russia in WWII, with the RAF I think.
They had a binge on aviation fuel.

The guy was blind.

I am surprised to read here about all the odd things found in the
poisonous vodka; seems like their taste would put off any drinker. 
The German reports have mentioned the stuff being made with cheap
alcohol of the type poisonous for human consumption, which makes more
sense  - to me, at least.

Thanks for the five stars and the very generous tip!

~Pink