[Fixed it][1] for you. And no, this is *not* a bug, but how Markdown works.

The key thing is to indent one level further *and* use a 4-space indent, so make it 8 spaces to indent. No need to use incrementing numbers. Use `1.` for every list item. Also no need for `<code>` or `<pre>` blocks - we don't have that in Markdown.

So, an example:

-------

    1. item text.

       some text below the item but under the same item.

    1. next item increments numbers automatically.

    1. Here's some code:

            Code block line 1
            Code block line 2

    1. And here's item 4.

---------

Renders to

---------

1. item text.

   some text below the item but under the same item.

1. next item increments numbers automatically.

1. Here's some code:

        Code block line 1
        Code block line 2

1. And here's item 4.

  [1]: http://askubuntu.com/revisions/319982/2