nooo, no, no, no. You first close the normalfont tag and then open the blockquote "session". Then, you first close the blockquote "session" and reopen the normalfont tage.

HTML nesting as simple:

<a><b><c> </c></b></a>

or

<a></a><b></b> etc.

You can't have <a><b></a></b> (which is what you're suggesting).

Anyways, it's no biggie.

As for the additional <br>: that space comes from using <blockquote></blockquote> to begin with. It adds a line automatically, which is rendered by the forum as a <br>. If it bothers you THAT much, you can simply remove from the global.php the <blockquote></blockquote> and leave it as <pre></pre> only. This will display the code correctly, it just won't centralize it in the middle of the post.