WordPress Losing Formatting

I haven’t updated or posted to my WP blog in a few days but then just today when I logged into it and created a post, when I clicked “Publish” and went to review my post, all paragraph formatting was lost. Meaning when I wrote the post, I was using “Visual” tab to create the post. When I wanted to start a new paragraph, I would just press “Enter” and it would do a new double-spaced line for the next paragraph. But NOW when I create a new post with paragraph breaks, once I click “Publish” and go back to review the post, it’s just a wall of text; all paragraphs I put in got ran into the paragraph above and it just looks like one run-on page.

Going back to put the paragraphs in by pressing “Enter” on the Visual tab doesnt work. When I click “Update” the paragraph breaks are still not there. I have to go into HTML tab and manually put the <p> tag in there.
Why would WP all of a sudden start doing this? I have made no changes nor have I added any new plugins or updated any of those.

I am using WordPress 3.0.1 with my own hosting.