To the OPS. I think some of your confusion on the topic of bonding neutral to ground is due to your terminology. You use the terms "upstream" and "downstream" several times in your post, but they really have no meaning in an AC system, since current reverses 60 times per second. So I really don't know what exactly you are referring to when you discuss the "upstream" neutral.
Something else to consider. The neutral is bonded to earth ground at the power pole by the utility company. This is done so that the voltage on the neutral is essentially earth potential, typically taken to be zero volts. So at least in principal, touching one hand to the neutral and one to earth should not result in a shock, since they are both in theory at the same potential. In practice, it is certainly common for the neutral to have a voltage on it, usually small, but not zero. This can occur for a variety of reasons, in particular since neutral carries current, and has some resistance, there will be voltage drop along the neutral, so the neutral at the device will be at higher potential (voltage) at the device than at the panel, and will be at higher potential at the panel than it is at the power pole. So grabbing the neutral is never a good idea, but generally the voltage level on the neutral is going to be low.
If there is an open neutral between the device and the panel, your device will not function, since there is no return path for current. If for some reason you bonded the neutral to the equipment grounding conductor (EGC) at the device, well then current would flow along the EGC, back to the panel, and back to the power pole via the (presumably intact) neutral between the panel and the power pole. If the neutral between the power pole and the panel was open, then current would flow between the device and the grounding rod via the EGC, but since the grounding rod typically has relatively high resistance (25 ohms is pretty common), you would have a series circuit connecting the device to ground via the grounding rod, and likely your device would not function properly, if at all, since the combined resistance would be above the resistance of the device alone, hence current would be low, perhaps too low to correctly run the device.
There would certainly be potential for shock if you grabbed the EGC under these conditions, since the EGC would be at something close to 120V, depending on the ratio of resistance between the EGC and the device. And unfortunately the breaker would not trip under these conditions. So clearly you don't want to bond the EGC and the neutral at the device. As for bonding them at the panel, that is for lightning protection only, certainly it is not to allow an alternate path to ground in the event the POCO neutral is lost.