I picked a story from the author that rlh3 posted:
http://www.literotica.com/s/down-drinking-at-the-bar. The choice was simply that it had a short first paragraph.
When I look at the code your version is producing, at the start I see:
Code:
<h3>Down Drinking at the Bar</h3>
<div>
<p>Joe Morrison wasn't particularly happy. His wife, who had been much too fond of drink had developed Korsakov, and she'd been in a care centre for years. He usually visited her in the afternoons.<br />
<br />
Life was lonely at home; it had been lonely for as long as he could remember. There were a few comforts he'd stuck to, all those years: his collection of poetry, string quartets, a dram before bed and the barmaid at the Rose and Crown.<br />
<br />
.
.
.
"Didn't you hear? He drove into tree. Must've been dead at once."<br />
<br />
"Oh no," Polly said. She slumped down with her arms on the bar, put her head on her arms and cried.</p>
</div>
When I strip the paragraph tag, I get:
Code:
<h3>Down Drinking at the Bar</h3>
<div>
<p>Joe Morrison wasn't particularly happy. His wife, who had been much too fond of drink had developed Korsakov, and she'd been in a care centre for years. He usually visited her in the afternoons.</p>
<p>Life was lonely at home; it had been lonely for as long as he could remember. There were a few comforts he'd stuck to, all those years: his collection of poetry, string quartets, a dram before bed and the barmaid at the Rose and Crown.</p>
.
.
.
<p>"Didn't you hear? He drove into tree. Must've been dead at once."</p>
<p>"Oh no," Polly said. She slumped down with her arms on the bar, put her head on her arms and cried.</p>
</div>
The first one always has the blank lines when reading. The latter can be styled however you want it.
When I look at the method replace_br_with_p, I found the following comment:
Code:
# Find all bexisting blocks with p, pre and blockquote tags, we need to shields break tags inside those.
That's what made me strip the paragraph tag.