Since multiline paragraphs have been permitted since 0.4, it should also be
the case for list elements. I.e.
{{{
* some long
list item
}}}
should be rendered like
{{{
* some long list item
}}}
An empty line would be used to start a paragraph.

An empty line marks the end of all lists, even deeply nested ones:
{{{
* a
* b
** c

*d
}}}
is rendered as
{{{
<ul>
<li>a</li>
<li>b</li>
<ul>
<li>c</li>
</ul>
</ul>
<ul>
<li>d</li>
</ul>
}}}

In addition, any markup that doesn't belong in a list will end the list. For instance, tables, headings or preformatted blocks are not allowed inside list elements, and thus a markup that starts any of them will cause a list to end. An alternative solution, ignoring the markup when it appears inside a list, would introduce a nasty special case.

As a general rule of thumb, any inline elements are allowed inside list while the block elements (ones that start on their own line) will cause the list to end.