I'm using the PHP port of Markdown, but I noticed the same effect on your dingus <http://daringfireball.net/projects/markdown/dingus> The problem I'm seeing is when I have an bulleted list and the last item of the list contains a block quote. The blockquote does not terminate correctly, and adding another blockquote after the list ends up extending the original blockquote. Here's what I mean:

##Heading 1
- Item 1
- Item 2
- Item 3 contains a blockquote:
> quote line1 > quote line2

##Heading 2
> This should be a new blockquote > but turns out to be just a > continuation of the first blockquote > and doesn't get indented

##Heading 3
> Another block quote here. > this one is correct


This becomes...

<h2>Heading 1</h2>

<p><ul>
<li>Item 1</li>
<li>Item 2</li>
<li>Item 3 contains a blockquote:</p>

<blockquote>
 <p>quote line1 <br />
 quote line2  </li>
 </ul></p>

 <h2>Heading 2</h2>

 <p>This should be a separate blockquote <br />
 but turns out to be just a <br />
 continuation of the first blockquote <br />
 and doesn't get indented</p>
</blockquote>

<h2>Heading 3</h2>

<blockquote>
 <p>Another block quote here. <br />
 this one is correct</p>
</blockquote>

I need a way to terminate that first blockquote before ##Heading 2. I just noticed in your cheetsheet that nested blockquotes within lists isn't supported, so maybe that's a no-no.
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