I was looking at the revisions of a question, and it occurred to me that there are unclosed
<em> tags in the HTML code that cause a large portion of the text to be italic (namely, from somewhere in point 3's code to the end of the post).
We have improved the revision diff algorithm.
We're currently testing it here on Meta; once we're certain there are no problems, it will go out to the other sites as well. Your example was one of those I tested, and it is handled correctly by the new version.