[Plugin: Q&A] 404 when submitting answer with nested html tags

I have installed the Q&A Lite plugin and it works well except that the default WYSIWYG text editor does not allow the submission of content having nested HTML elements. For example, text with a
ul tag with
li tag in it. Submitting text containing bullets using visual editor leads to a 404 Not Found! This happens when I either edit existing answers or write a new answer and add bulleted text to it. That does not happen when I edit an existing question.

The URL that the answer form posts to looks valid but still the 404 occurs. I have spent several hours trying to figure out what’s wrong but haven’t found the source of the problem. Will appreciate any pointers. Thanks!

Link to test deployment: http://applyahead.com/qa/questions/
uname: guest
pass: nopass

All other plugins have been deactivated while running Q&A Lite.

http://wordpress.org/extend/plugins/qa/