I'd rather just solve the problem by having PerlMonks render PRE blocks rather similarly (but not identically) to how it renders CODE blocks.

This is an equally good and seemingly viable solution. For more stuff in this vein, I've occasionally felt the need for <code> blocks that still allow (some) formatting tags and/or entities, like in the [id://578807#conclusion|case] I was referring to above, perhaps in the form of suitable attributes, like:

<code allowentities="yes" allowtags="yes" wrapoff="yes">
[download]

I'd also be in favor of a toggle that turns off the wrapping tricks[...]

I second this too, perhaps in the form of another attribute as in the example above (of course they should all default to "no"). The point being that the problem with <pre> tags is that (some) people already knows about them, and it's just so easy to insert them, whereas such attributes would be totally uncommon and annoying enough to insert that one would really do so only in those rare cases he would really need them.

BTW, if you don't like my idea, one reason certainly could be that you don't use IE and so don't have access to (a working version of) the lovely "auto code wrap" feature. It is probably a bit of work to borrow a copy of IE (or other soft-hyphening browser) and set up "auto code wrap" and play with it enough to see how lovely it works, but you might consider doing that... (:

Actually I have Exploder installed but use exclusively FF. You made me curious about this "lovely feature" and I think I will try, but I won't change my browser anyway. Only I will hope the FF guys will implement something similar soon too!