Hmm.... the WYSIWYG editor either isn't very WYSIWYG or maybe is an addon that's disabled/not installed here, and I was mistaken - that setting simply controls whether or not the Quick Reply box is visible by default or has to be expanded to show it. Sory to have wasted your time.
Way Way back I remember similar issues pasting stuff into the Microchip user forums, where how many new lines you got depended on the browser and version, your OS, and even what application the text was copied from. Pasting from MS Word was notably problematic, and the only somewhat reliable workaround was to first paste into Notepad (or your OS's default text editor) and re-copy it to ensure the line endings were in OS default form that the browser was expecting.