parsing question - lists and blockquotes

[Eric Heimerman]

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.