Display posts with categories

Hi,

(I can’t seem to edit the above post, so I reposting properly to comply with forum rules)

I used the forum search for this particular problem and provided a great solution except for one problem.

Essentially what I want to do is when someone views the tag page, I want to display the posts that have that tag.

I want the posts to be sorted by what category they are in though.

The code snippet I am using is

http://pastebin.com/WVNAcduB

I placed it within the <?php while ( have_posts() ) : the_post(); ?> loop. The problem is outputs the posts that have the matching tag underneath of every category on the site. Even though the posts may not be in those categories.

To see an example go to
http://www.higherthinkingtv.com/tag/india/

I had the category code before the while loop, but I noticed it was not displaying properly

Here is the entire code for the loop and the attempted category addition.

http://pastebin.com/tmBB9tNv

Thanks,