diff --git a/Text/Markdown/Block.hs b/Text/Markdown/Block.hs
--- a/Text/Markdown/Block.hs
+++ b/Text/Markdown/Block.hs
@@ -132,7 +132,7 @@
             mapM_ yield $ reverse blanks
             yield y
             go []
-        | otherwise = mapM_ leftover blanks >> leftover t
+        | otherwise = mapM_ leftover (t:blanks)
       where
         (x, y) = T.splitAt leader t
 
diff --git a/markdown.cabal b/markdown.cabal
--- a/markdown.cabal
+++ b/markdown.cabal
@@ -1,5 +1,5 @@
 Name:                markdown
-Version:             0.1.0
+Version:             0.1.0.1
 Synopsis:            Convert Markdown to HTML, with XSS protection
 Description:         This library leverages existing high-performance libraries (attoparsec, blaze-html, text, and conduit), and should integrate well with existing codebases.
 Homepage:            https://github.com/snoyberg/markdown
diff --git a/test/examples/multiline-paragraphs.html b/test/examples/multiline-paragraphs.html
new file mode 100644
--- /dev/null
+++ b/test/examples/multiline-paragraphs.html
@@ -0,0 +1,5 @@
+<p>This is a multiline
+paragraph.</p><ul><li><p>Multiline paragraph
+in a list.</p></li><li><p>The purpose of classy prelude is <i>not</i> to encourage writing polymorphic
+code based on the typeclasses provided. Though it's certainly possible to
+write code such as:</p></li></ul>
diff --git a/test/examples/multiline-paragraphs.md b/test/examples/multiline-paragraphs.md
new file mode 100644
--- /dev/null
+++ b/test/examples/multiline-paragraphs.md
@@ -0,0 +1,9 @@
+This is a multiline
+paragraph.
+
+*    Multiline paragraph
+     in a list.
+
+*   The purpose of classy prelude is *not* to encourage writing polymorphic
+    code based on the typeclasses provided. Though it's certainly possible to
+    write code such as: