I just went in and edited the formatting.php file and took out the <p>
break.
Like so:
$pee .= '<p>' . trim($tinkle, "\n") . "</p>\n";
<— Line 194 in formatting.php (in wp-includes)
to:
$pee .= '' . trim($tinkle, "\n") . "</p>\n";
I removed the <p>
completely and it solved my problems, but left the additional paragraph breaks (like wpautop normally would).