weird P tag behavior in posts

Not sure why, but when I post an image and want the text to wrap around that image, only the first paragraph wraps, and then the 2nd paragraph is placed underneath the image. It looks fine in the preview, de-activating by colorbox plugin doesn’t help, I don’t see anything by P tags in the code. Can anyone give some advice?

https://tcurranmusic.com/new/2012/01/24/grand-re-opening/

Thanks!