Following on from my previous bug report, which ultimately turned out to be a copy and paste problem, I think I've found another. If I create a blockquote in the body section of the editor, and then copy/cut + paste it into the extended entry field, it takes with it the formatting that the editor uses to show the blockquote in the WYSIWYG editor.
If I look at the HTML view, I can see that the original blockquote is a plain tag, with no style attribute, but the pasted version does contain a style attribute, and when I post this to my blog it overrides my CSS blockquote directives. I think this is the styling that TinyMCE uses to show the user that it's a blockquote - it has a 4px grey vertical line to the left of the text, and a slight indent.
Oh, thanks for noticing and reporting this. What a mess. Ugh, sorry about this.
There is another issue with Blockquotes in the latest release, which is that they are basically impossible to "get out of". I definitely need to fix some things with blockquotes ASAP and release another update.