I'm sorry. I've been leading you the wrong way. I forgot that markdown has the following [rule]:

> The only restrictions are that block-level HTML elements — e.g. `<div>`, `<table>`, `<pre>`, `<p>`, etc. — must be separated from surrounding content by blank lines, and the start and end tags of the block should not be indented with tabs or spaces.

The 'markdown=1" feature is supposed to be a copy of PHP's implementation and I was checking against that. But apparently PHP's implementation goes outside markdown's syntax rules and is a little overzealous in some cases.

So yes, you were initially correct, a blank line before and after is required. However, as that is the case for all raw html blocks, whether 'markdown=1' or not, I'm not sure why we need to document it for the extension specifically. Just stating that 'any block level raw html block as defined in the syntax rules with markdown=1 will work' should be sufficient.

Again, sorry for the confusion. That's what I get for trying to respond from my mobile device.

[rule]: http://daringfireball.net/projects/markdown/syntax#html