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With the exception of when the "whitespace" style attribute exists (which can be used externally, internally, or inline), blank spaces between block elements in the html code have no bearing on how that code is rendered. None. If the "whitespace" attribute doesn't exist anywhere in your css or html files, then any unwanted spacing between elements has to be the fault of some other styling (or lack thereof) present in the html or css.
If you simply prefer to have total control over the spacing/indentation of your html code for aesthetic purposes, then turn off all Clean Source settings in the preferences. If your xhtml is already well-formed and error free, it won't be altered (provided you're using one of the latest versions of Sigil).
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