Perhaps a quick one-liner:

$ echo "3:3 And he shall offer of the sacrifice of the peace offering 
+an
> offering made by fire unto the LORD; the fat that covereth the
> inwards, and all the fat that is upon the inwards, 3:4 And the two
> kidneys, and the fat that is on them, which is by the flanks, and th
+e
> caul above the liver, with the kidneys, it shall he take away.
> 3:5 And Aaron's sons shall burn it on the altar upon the burnt
> sacrifice, which is upon the wood that is on the fire: it is an
> offering made by fire, of a sweet savour unto the LORD.
> " | perl -pe 's/[\r\n]+/ /g; s/(\d+:\d+)/\n$1/g;'

3:3 And he shall offer of the sacrifice of the peace offering an  offe
+ring made by fire unto the LORD; the fat that covereth the  inwards, 
+and all the fat that is upon the inwards,
3:4 And the two  kidneys, and the fat that is on them, which is by the
+ flanks, and the  caul above the liver, with the kidneys, it shall he
+ take away.
3:5 And Aaron's sons shall burn it on the altar upon the burnt  sacrif
+ice, which is upon the wood that is on the fire: it is an  offering m
+ade by fire, of a sweet savour unto the LORD.
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Update: Of course, the above seems to be long because of the need to echo some sample data for demonstrating the example, but if your input data is in a file named "bible.txt, it boils down to one code line:

perl -pe 's/[\r\n]+/ /g; s/(\d+:\d+)/\n$1/g;' bible.txt
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