I see your page is XHTML and it validates...
But like allmost any XHTML page it's served as text/html
and not application/xhtml+xml
(if it were IE would not recognize it, and ask if you wanted to save the file). So allthoug it's a nice idea to use XHTML, every browser gets served XHTML and told it's HTML so your nice valid XML is parsed as html tagsoup. (If you really wand compatibility, and you don't really need to parse your page as XML, then "HTML 4.01 Strict" is still the best choice)
Still I'm not sure how that could affect the list rendering (as the syntax in a list should be essentially the same), but if IE don't understand a tag it might not get the endtag. It reminds me of the effect you get if you forget the endtag on a li, and have a just a little padding on it...
Never try to get pixel perfect rendering in IE, you'll go mad and you probably won't succeed; learn to live with it. :P