I think it's the <p> tag that is nested in the <li> tag. It's not really necessary.
Changing the code from:
Code:
<ul class="itemizedlist">
<li class="listitem">
<p>Item1</p>
</li>
<li class="listitem">
<p>Item2</p>
</li>
<li class="listitem">
<p>Item3</p>
</li>
<li class="listitem">
<p>Item4</p>
</li>
</ul>
To:
Code:
<ul class="itemizedlist">
<li class="listitem">Item1</li>
<li class="listitem">Item2</li>
<li class="listitem">Item3</li>
<li class="listitem">Item4</li>
</ul>
Seems to work as expected in both the epub and the resulting mobi.