Actually I have a similar problem. I think it is dependent on the structure of the html you have pasted in.
For instance, grab the description for a book from this page:
http://www.dimorrissey.com/book_theplantation.html
Now if you paste that into a completely blank description in the Edit Metadata dialog (as you would have from a new/empty book), then no amount of remove formatting will remove the padded spacing at the top. You can verify this by flicking to the HTML Source tab.
OTOH if before pasting I type "SUMMARY:" and press shift enter, then paste in the text, select all, then do remove formatting, I get the result I wanted.