[DiapDealer]

Well, after spending the morning with Kindlegen, mobiunpack.py, and the Kindle Previewer... I think I can confirm that negative indents AND increased left margins are not possible at the same time. Jellby called that (happy for Jellby, sad for me). However, positive first-line indents with increased left margins are certainly possible (on the Kindle, anyway) without resorting to too much trickery.

First off: the WIDTH attribute of the <blockquote> element always controls first-line indention of the text within that blockquote (when the mobi is built with kindlegen)—always.

Then, if you ignore HTML convention and put a <blockquote> element inside a <p> element... the WIDTH attribute of that <p> element becomes the control for the left-margin of the <blockquote> element. Seems weird to me but maybe people already know this.

Anyway... take the following code example:

<p width="0">
  <blockquote width="0">
    <font size="-1">Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo.</font>
  </blockquote>
</p>

That gives you the standard blockquote left margin with no first-line indent. Increasing the width parameter of the <blockquote> element will increase the first-line indent of that blockquoted text accordingly:

<p width="0">
  <blockquote width="2em">
    <font size="-1">Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo.</font>
  </blockquote>
</p>

Here's the kicker—again, I apologize if everyone knows this already—to increase the left margin of the blockquoted text, you increase the width attribute of the <p> element NEGATIVELY. "-1em" "-2em" "-3em" will move all of the text further to the right:

<p width="-2em">
  <blockquote width="2em">
    <font size="-1">Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo.</font>
  </blockquote>
</p>

It all blows up when you try to give the <blockquote> element a negative width. You'll get your hanging indent, but you lose any left margin you had.

I'm attaching a mobi that will show the different results on the Kindle. It was made with Kindlegen, so you can unzip it to get to the source html as well. Maybe someone else can benefit.

It was an enlightening morning for me... but then again, I'm easily amused.

EDIT: the negative increasing of the <p> parameter only seems to have that effect on the actual Kindle and in Kindle Previewer. It has no affect on the left margin in K4PC or MobiPocket reader.