I solved this as best as possible by combining a slightly modified parse_shortcode_content function from Donal MacArthur (his originally manually calls wpautop... which I've removed. With the re-ordering of default filters to run wpautop much later... after the shortcode has already been processed instead of before.
// Clean up WordPress shortcode sormatting - important for nested shortcodes
// Adjusted from http://donalmacarthur.com/articles/cleaning-up-wordpress-shortcode-formatting/
function parse_shortcode_content( $content ) {
/* Parse nested shortcodes and add formatting. */
$content = trim( do_shortcode( shortcode_unautop( $content ) ) );
/* Remove '' from the start of the string. */
if ( substr( $content, 0, 4 ) == '' )
$content = substr( $content, 4 );
/* Remove '' from the end of the string. */
if ( substr( $content, -3, 3 ) == '' )
$content = substr( $content, 0, -3 );
/* Remove any instances of ''. */
$content = str_replace( array( '<p></p>' ), '', $content );
$content = str_replace( array( '<p> </p>' ), '', $content );
return $content;
}
and moving the filters
// Move wpautop filter to AFTER shortcode is processed
remove_filter( 'the_content', 'wpautop' );
add_filter( 'the_content', 'wpautop', 99);
add_filter( 'the_content', 'shortcode_unautop', 100 );
EDIT:
The parse_shortcode_content()
function is no longer required (if it ever was). Simply adjust the filter order.