Index: tests/phpunit/includes/parser/NestingTest.php
===================================================================
--- tests/phpunit/includes/parser/NestingTest.php   (revision 0)
+++ tests/phpunit/includes/parser/NestingTest.php   (revision 0)
@@ -0,0 +1,62 @@
+<?php
+
+/**
+ * @group Parser
+ */
+class NestingTest extends MediaWikiTestCase {
+   
+   function provideCases() {
+       return array( 
+           array( "<foo>123</foo>", "foo", "123", array() ),
+           array( "<foo>foo</foo>", "foo", "foo", array() ),
+           array( "A<foo>foo</Foo>B", "foo", "foo", array() ),
+           array( "A<foo a=1 b='foo'>123<foo>456</foo>789</foo>B", "foo", "123<foo>456</foo>789", array( "a" => "1", "b" => "foo" ) ),
+           array( "<foo<foo", "foo", null, null ),
+           
+           array( 
+               "<ref name=\"citation:1\">" . 
+                       "<ref name=\"Other2001\"/>" . 
+                    "<ref name=\"YetAnother2004\"/>" .
+                "</ref>",
+                "ref", "<ref name=\"Other2001\"/><ref name=\"YetAnother2004\"/>", array( "name" => "citation:1" )  
+           ),
+           
+           array( "<ref name='x' foo ><ref/></ref >", "ref", "<ref/>", array( "name" => "x", "foo" => "foo" ) )
+           
+           
+       );
+   }
+
+   function provideNotWorkingCases() {
+       return array(
+           array( "<foo a='<foo>'>123</foo>", "foo", null, null ),
+           array( "<foo foo='123'>123<!--</foo>-->456</foo>", "foo", "123456", array( "foo" => "123" ) ),
+       );
+   }
+   
+   var $mInnerText;
+   var $mParams;
+   
+   /**
+    * @dataProvider provideCases
+    */
+   function testCases( $wikiText, $tag, $expectedInnerText, $expectedParams ) {
+       global $wgParserConf;
+       $parser = new Parser( $wgParserConf );
+       
+       $parser->setHook( $tag, array( $this, 'tagCallback' ) );
+       $parserOutput = $parser->parse( $wikiText, Title::newFromText( 'Test' ), new ParserOptions );
+
+       $this->assertEquals( $expectedInnerText, $this->mInnerText );
+       $this->assertEquals( $expectedParams, $this->mParams );
+       
+       $parser->mPreprocessor = null; # Break the Parser <-> Preprocessor cycle
+   }
+   
+   function tagCallback( $innerText, $params, $parser ) {
+       $this->mInnerText = $innerText;
+       $this->mParams = $params;
+       
+       return "dummy";
+   }
+}
Index: includes/parser/Preprocessor_DOM.php
===================================================================
--- includes/parser/Preprocessor_DOM.php    (revision 110110)
+++ includes/parser/Preprocessor_DOM.php    (working copy)
@@ -413,18 +413,51 @@
                    $close = '';
                } else {
                    $attrEnd = $tagEndPos;
-                   // Find closing tag
-                   if ( preg_match( "/<\/" . preg_quote( $name, '/' ) . "\s*>/i",
-                           $text, $matches, PREG_OFFSET_CAPTURE, $tagEndPos + 1 ) )
-                   {
-                       $inner = substr( $text, $tagEndPos + 1, $matches[0][1] - $tagEndPos - 1 );
-                       $i = $matches[0][1] + strlen( $matches[0][0] );
-                       $close = '<close>' . htmlspecialchars( $matches[0][0] ) . '</close>';
-                   } else {
-                       // No end tag -- let it run out to the end of the text.
+                   
+                   // we know that one start tag was already found
+                   $numOfStartTags = 1;
+                   $numOfEndTags = 0; 
+                   $offset = $tagEndPos;
+                   $pattern = "/<" . preg_quote( $name, '/' ) . "[^>]*>" . "|" . "<\/" . preg_quote( $name, '/' ) . "\s*>/i";
+               
+                   while( $numOfStartTags != $numOfEndTags ) {
+                       // match start tag or end tag 
+                       if( preg_match( $pattern, $text, $matches, PREG_OFFSET_CAPTURE,     $offset + 1 ) === 0 ) {
+                           // nothing found
+                           break;
+                       }
+               
+                       // what is it, start or end tag?
+                       if( substr( $matches[ 0 ][ 0 ], 0, 2 ) === "</" ) {
+                           $numOfEndTags++;
+                       } else {
+                           $numOfStartTags++;
+                       }
+               
+                       $previousMatches = $matches;
+                       $offset = $matches[ 0 ][ 1 ];
+                   }
+                   
+                   if( $numOfEndTags === 0 ) {
+                       // no end tag, swallow everything
                        $inner = substr( $text, $tagEndPos + 1 );
                        $i = strlen( $text );
                        $close = '';
+                       
+                   } else {
+                       
+                       if( $numOfStartTags === $numOfEndTags ) {
+                           // match made in heaven, all start tags have end tags
+                           $inner = substr( $text, $tagEndPos + 1, $offset - ( $tagEndPos + 1 ) );
+                           $i = $offset + strlen( $matches[0][0] );
+                           $close = '<close>' . htmlspecialchars( $matches[0][0] ) . '</close>';
+                       
+                       } else {
+                           // not balanced, at least one start tag is orphan
+                           $inner = substr( $text, $tagEndPos + 1, $offset - ( $tagEndPos + 1 ) );
+                           $i = $offset + strlen( $previousMatches[0][0] );
+                           $close = '<close>' . htmlspecialchars( $previousMatches[0][0] ) . '</close>';
+                       }
                    }
                }
                // <includeonly> and <noinclude> just become <ignore> tags