I don't really see a problem with the code. In fact, copying your code to my machine and running it seems to give the result you are looking for.

Output:

match: before ..... <textarea class="FolderTxtArea" name="blah"><%=foo
+::doSomething%></textarea>
varmatch:  <%=foo::doSomething%>
match: after  .... <textarea class="FolderTxtArea" name="blah"></texta
+rea>
match: after testinsert  .... <testinsert<%=foo::doSomething%> class="
+FolderTxtArea" name="blah"></testinsert<%=foo::doSomething%>>
[download]

I did notice that the output you're giving in your question doesn't match the order in which the print statements appear in the code. Perhaps you're looking at old output?

~CubicSpline
"No one tosses a Dwarf!"