It's nothing to do with Debug.Log - the issue is that Vector3.ToString() gives back a string with 1 decimal place accuracy (ToString being called on any non string object for you).
What you could do is use the overload of ToString which takes a format string, you'd use ToString("F2") or any of the other format strings that are possible, e.g. http://msdn.microsoft.com/en-us/library/dwhawy9k.aspx
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