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Just an FYI. I'm using CKeditor library 4.0.1. Not sure if this happens with other versions of the Ckeditor library.
After I insert a media item the markup looks correct, but when I select the inserted media item(an image in this case) and choose a style(like media-right) from the style dropdown it garbles the media module's markup.
This doesn't happen when I try the same thing with TinyMCE 3.5.8.
I'm not sure what is causing this problem? I just wanted to post this here in case it sounded like a problem with the wysiwyg module.
Feel free to close this issue if it is CKeditor specific.
FYI.. I'm using the media-2.x-dev and file_entity-2.x-dev