Hi Duane,
First, thanks for the generous donation you sent! Very appreciated!
I have encountered issues like this before in the various editors. It doesn't always happen but it seems like if you select something and format it and it was already formatted sometimes it can get very messed up as you describe and the only way to fix it once it gets that way is using the html view and correcting the markup. It's like once that nesting starts it just keeps getting worse. I think it is very difficult to make a perfect web based html editor, there is a lot of complex logic to parsing and validating the markup, it tries to correct things for you but sometimes this just backfires and it creates problems instead.
If we could come up with repeatable steps to produce the problem then we could report it as bug to TinyMCE and/or FCKeditor.
Not sure if that was a typo, but note that </br> is not valid, it should be <br />
Best,
Joe