I am having similar problems, as I have to paste newspaper articles from Quarkxpress into WordPress.
Except if I use the Visual side of the editor, whether or not the “Paste as Text” button is clicked, it pastes all my text with NO line breaks! Everything just runs together!
All I have been able to do is move over to the Text (code) side and paste it there, and that at least gives me soft breaks.
This still has severely impacted my workflow, so I hope WordPress addresses it very soon.
I am having the same issue. The only solution seems to be to keep Simple Custom Post Order deactivated unless I need to rearrange posts.
I fixed it! Found a plugin installed that wasn’t on the other sites: Simple Custom Post Order. Deactivated it and everything is back to normal!