Medical oxygen costs more.
The purity of welding oxygen is just fine.
You're right. I did some more research on this and my info is out of date. To count as medical or food grade (USP) oxygen must be at least 99% pure and be odorless. These days, for convenience, most distributors sell just USP O2. The only real difference between grades is how the tanks are filled and, at higher levels, the degree of purity. Oxygen tanks are routinely flushed to remove high levels of contaminants before they are refilled, since acetylene/oil + oxygen + compression = bomb.
In terms of purity, there are multiple grades of oxygen, although exact grades vary depending on manufacturer and state regulations. The lowest level will have at least 99% purity; with the remaining 1% usually being some combination of water vapor, CO2, CO2 or hydrocarbon gas (e.g., methane, acetylene). The highest grade is "Grade 5" or "5-9" oxygen, which is 99.999% pure and is used in research. The various grades below that differ in what compounds other than oxygen remain in the tank. Different grades are used by divers, aviators and for medical purposes, but for brewing any grade will do, since the trace contaminants are at trivial levels.
Good info here:
http://www-personal.umich.edu/~lpt/oxlabel.htmand here:
http://www.c-f-c.com/specgas_products/oxygen.htm@ Punatic. If you're seriously hurting for O2 cylinders, I bet that there are a lot of dive shops in your area.