T-SQL bulk insert fails on specific word "DENY" in string-data
After some experimentation I found the following:  

The word DENY is indeed a red herring. The problem is caused by the (xx,xx,xx,xx) sequence behind it.
For some obscure reason this causes errors if the bulk insert is run from a dynamic SQL string.
(I was using dynamic SQL as I need to iterate through a list of input filenames derived from another table. bulk insert doesn't allow the use of a variable for the input filename. So I had to programmatically generate each bulk insert statement and then EXEC() it.)

The bulk insert with the same input file works fine if run directly. BCP import of the same file is OK too.

If the column containing this sequence is NOT the last column of the input row, it works as expected.

As I have full control of the script that generates these files I could add a 4th dummy column containing just a =. This solved the issues with the bulk insert.

Obviously I still don't understand the root-cause of this. At least I have a workaround.

Microsoft states on MSDN numerous times that 


  "bulk insert of CSV files is not supported, but may work in some
  cases"


They NEVER say why or what the exact problem is...
Makes me wonder if I have run into a known problem...