C# dictionary value reference type - please explain why this happens

I don't understand the results of the following linqpad query in C#. The comments should explain where I am confused.

void Main()
{
    Dictionary<string, testClass> test = new Dictionary<string, testClass>();

    string key = "key";
    testClass val = null;

    test.Add(key, val);

    val = new testClass();

    test[key].Dump(); //returns null.   WHAT? I just set it!!!



    test[key] = val;
    val.Text = "something";
    //  returns val object, with Text set to "Something". 
    //  If the above didn't work, why does this work?
    test[key].Dump(); 



    val.Text = "Nothing";
    //  return val object, with Text set to "Nothing". 
    //  This, I expect, but, again, why didn't the first example work?
    test[key].Dump(); 



    val = null;
    //  returns val object, with Text set to "Nothing"...WHAT?? 
    //  Now my head is going to explode...
    test[key].Dump(); 

}

// Define other methods and classes here

public class testClass
{
    public override string ToString()
    {
        return Text;
    }

    public string Text { get; set;}     
}