Yup, I see the same problem in an even simpler context. I'm using markup like <sup>1</sup> in <ul><li> text (not linked as in your example) for citation lists on some old pages, and it renders on the cached page as:
Smith et. al<sup>1
This is sort of the opposite of what you're seeing; In your case it was the </sup> closing tag that got changed to HTML character-entities. In my case, it was the opening <sup> tag. Because of this difference in our applications, it looks like a problem handling <sup>s nested within other tags.
So that's a confirmation of what appears to be a fairly straightforward bug.
i've also noticed issues with having an inline style tag inside the <a> tag
if the style is in front of the href part of the tag, then the cache spits out the whole <a> tag instead of showing a link.(not sure if you use the cache to spider or count links...if so, that could be a major issue with your link part of the algo)