What stops someone from faking a rating on OTC web of trust? What mechanisms does OTC web of trust have against someone creating several accounts and trading between with themselves over a period of time, giving each other perfect ratings.
The global ratings are fairly easy to manipulate as you describe, and it has been done before. There is some minor protection provided by the requirement that you need a positive OTC rating to rate anyone else.

#bitcoin-otc also supports "trust rating" (example) which can't be easily manipulated.