Hi Ken --
Your post gave me an idea. I tried setting the selectedhtml variable myself, first to a plain text string with no HTML tags, then a string wrapped in paragraph tags, and finally a string wrapped in strong tags. The result was very telling.
As you might guess, the plain text string produced a perfect result. Everything looked fine. Same with the text wrapped in strong tags. But the massive failure came with the text wrapped in paragraph tags. So the take-home lesson is: strip any opening and closing paragraph tags before you paste the HTML.
Any chance you guys could build this functionality into the editor so we don't have to do it manually?
As a side note, we also found that when you select text that falls to the right of a line break tag, when you paste the new HTML the editor removes that tag (but correctly pastes the selected text).
Thanks for the help!
Geoffrey