I can create a post and do all my formatting. I then click View of my draft and it looks correct. I Publish the post and the formatting disappears on the live blog. I lose italics, bold, returns, etc. I go back and look at my post in the editor and it looks correct, view of draft looks correct, I update and the formatting is still missing on the live post.
Did more checking. It is only the posts on the front page. If you click on the blog post and go to the actual page all the formatting is correct. So something is wrong when posts are placed on the front page.
My assumption is the front page is a summary/overview of the real blog posts and thus it must not transfer all the formatting correctly. I enabled summary only mode rather than full post so I am ok that it is missing formatting.