Index: wp-includes/js/tinymce/plugins/wordpress/editor_plugin.dev.js
===================================================================
--- wp-includes/js/tinymce/plugins/wordpress/editor_plugin.dev.js	(revision 19750)
+++ wp-includes/js/tinymce/plugins/wordpress/editor_plugin.dev.js	(working copy)
@@ -386,7 +386,7 @@
 					o.content = o.content.replace(/<img[^>]+>/g, function(im) {
 						if (im.indexOf('class="mceWPmore') !== -1) {
 							var m, moretext = (m = im.match(/alt="(.*?)"/)) ? m[1] : '';
-							im = '<!--more'+moretext+'-->';
+							im = '\n</p><!--more'+moretext+'--></p>\n';
 						}
 						if (im.indexOf('class="mceWPnextpage') !== -1)
 							im = '<!--nextpage-->';