On a SQL Server 2008 R2 database server, I attempt to insert data into a table, but the INSERT statement's OUTPUT clause returns only zeros for the table's Identity column. The INSERT statement below is part of a larger script with many statements wrapped in a single transaction.
Here is the statement:
INSERT INTO CountryDivisions (
    [CountryID]
    , [ParentDivisionID]
    , [DivisionCodeISO]
    , [DivisionCodeShort]
    , [DivisionType]
)
    OUTPUT
        inserted.[CountryDivisionID] -- Identity column, returning only zeros!
        , inserted.[CountryID]
        , inserted.[ParentDivisionID]
        , inserted.[DivisionCodeISO]
        , inserted.[DivisionCodeShort]
        , inserted.[DivisionType]
        INTO @NewCountryDivisions
    SELECT
        dc.[CountryID]
        , null
        , COALESCE(mcd.DependentDivisionCodeISO, mcd.ParentCountryAlpha2Code + '-' + mcd.DependentCountryAlpha2Code)
        , mcd.DependentCountryAlpha2Code
        , mcd.DependentDivisionType
    FROM
        @MoreCountryData AS mcd
        JOIN Countries AS dc
            ON dc.Alpha2Code = mcd.DependentCountryAlpha2Code
    WHERE
        NOT EXISTS (
            SELECT *
            FROM CountryDivisions AS cd2
            WHERE
                cd2.[CountryID] = dc.[CountryID]
                AND cd2.[DivisionCodeShort] = mcd.DependentCountryAlpha2Code
        )
This is what I see when selecting from @NewCountryDivisions:

Here is the table's definition:
CREATE TABLE [dbo].[CountryDivisions](
    [CountryDivisionID] [int] IDENTITY(1,1) NOT NULL, -- identity column which is only returning zeros!
    [CountryID] [int] NOT NULL,
    [ParentDivisionID] [int] NULL,
    [DivisionCodeISO] [nvarchar](10) NULL,
    [DivisionCodeShort] [nvarchar](10) NULL,
    [DivisionType] [nvarchar](150) NULL,
    [LastUpdatedBy] [sysname] NOT NULL DEFAULT (user_name()),
    [LastUpdatedDateTime] [datetime] NOT NULL DEFAULT (getutcdate()),
 CONSTRAINT [PK_CountryDivisions_CountryDivisionID] PRIMARY KEY NONCLUSTERED 
(
    [CountryDivisionID] ASC
)WITH (PAD_INDEX = OFF, STATISTICS_NORECOMPUTE = OFF, IGNORE_DUP_KEY = OFF, ALLOW_ROW_LOCKS = ON, ALLOW_PAGE_LOCKS = ON)
)
I am using INSTEAD OF triggers to update the two LastUpdated... columns. I am new to writing triggers, though I would not expect these to cause the problem, but just in case, here are their definitions:
CREATE TRIGGER [dbo].[CountryDivisions_InsertAudit]
    ON [dbo].[CountryDivisions]
    INSTEAD OF INSERT
    AS
    BEGIN
        SET NoCount ON
        INSERT INTO [dbo].[CountryDivisions] (
            -- I am assuming that SQL Server will apply the IDENTITY process to the [CountryDivisionID] column, so I am not inserting it myself.
            [CountryID]
            , [ParentDivisionID]
            , [DivisionCodeISO]
            , [DivisionCodeShort]
            , [DivisionType]
            , [LastUpdatedBy]
            , [LastUpdatedDateTime]
        )
            SELECT
                i.CountryID
                , i.ParentDivisionID
                , i.DivisionCodeISO
                , i.DivisionCodeShort
                , i.DivisionType
                , COALESCE(NULLIF(LTRIM(RTRIM(i.[LastUpdatedBy])), ''), USER_NAME())
                , COALESCE(i.[LastUpdatedDateTime], GETUTCDATE())
            FROM
                inserted AS i
    END
CREATE TRIGGER [dbo].[CountryDivisions_UpdatAudit]
    ON [dbo].[CountryDivisions]
    INSTEAD OF UPDATE
    AS
    BEGIN
        SET NoCount ON
        UPDATE [dbo].[CountryDivisions]
            SET
                CountryID = i.CountryID
                , ParentDivisionID = i.ParentDivisionID
                , DivisionCodeISO = i.DivisionCodeISO
                , DivisionCodeShort = i.DivisionCodeShort
                , DivisionType = i.DivisionType
                , LastUpdatedBy = COALESCE(NULLIF(LTRIM(RTRIM(i.[LastUpdatedBy])), ''), USER_NAME())
                , LastUpdatedDateTime = COALESCE(i.[LastUpdatedDateTime], GETUTCDATE())
            FROM
                [dbo].[CountryDivisions] AS cd
                JOIN inserted AS i
                    JOIN deleted AS d
                        ON d.CountryDivisionID = i.CountryDivisionID
                    ON cd.CountryDivisionID = i.CountryDivisionID
            WHERE
                -- only update records that have actually been updated.
                i.CountryID <> d.CountryID
                OR ISNULL(i.ParentDivisionID, -1) <> ISNULL(d.ParentDivisionID, -1)
                OR ISNULL(i.DivisionCodeISO, '') <> ISNULL(d.DivisionCodeISO, '')
                OR ISNULL(i.DivisionCodeShort, '') <> ISNULL(d.DivisionCodeShort, '')
                OR (
                    ISNULL(i.LastUpdatedBy, '') <> ISNULL(d.LastUpdatedBy, '')
                    AND UPDATE(LastUpdatedBy)
                )
                OR (
                    ISNULL(i.LastUpdatedDateTime, '1900-01-01') <> ISNULL(d.LastUpdatedDateTime, '1900-01-01')
                    AND UPDATE(LastUpdatedDateTime)
                )
    END