Like Rails' simple_format but avoids <p>/<br /> around some block tags.

unsimple_format.rb

# From Rails
def simple_format(text, html_options={})
  start_tag = '<p>'
  text = text.to_s.dup
  text.gsub!(/\r\n?/, "\n")                    # \r\n and \r -> \n
  text.gsub!(/\n\n+/, "</p>\n\n#{start_tag}")  # 2+ newline  -> paragraph
  text.gsub!(/([^\n]\n)(?=[^\n])/, '\1<br />') # 1 newline   -> br
  text.insert 0, start_tag
  text << "</p>"
end

# Like Rails' simple_format, but avoids e.g. <p><h4> and <br /><blockquote>.
# Only handles those two elements since that's all we need.
def unsimple_format(text)
  text.gsub(/\r\n?/, "\n").split(%r{(\n*(?:<h4>.*?</h4>|<blockquote(?: .*?)?>.*?</blockquote>)\n*)}im).map do |part|
    case part
    when /\A\s*\Z/, /<h4>/
      part
    when /blockquote/
      part.sub(%r{(<blockquote(?: .*?)?>)(.*?)(</blockquote>)}im) { $1 + simple_format($2) + $3 }
    else
      simple_format(part)
    end
  end.join
end

puts unsimple_format(DATA.read)

__END__

x
<h4>Halloa</h4>
s

<h4>Aloha</h4>


more space

<blockquote cite="Pelle">
foo
</blockquote>
bar