I discovered that having the sectionblock ID attribute in the close div tag can run into conflict with the parser, particularly with other extensions installed: Thread:Extension talk:Lingo/It's messing with HTML? It seems like the sort of thing that might come up in other contexts too.
I guessed that labeling the close div was probably important to the nesting though, and sure enough, changing $divend to just be a close div tag did break the nesting. If I have to choose an extension I'll choose SectionHide, but I did find this other approach using comments to label what div is being closed. I don't know if that would work for SectionHide since the attribute is actually functional and not a mere reminder, but I also don't know enough about extensions to know if you can scan for an HTML comment directly after a close div to get the same effect, so figured I would bring it up.
Thanks for all your hard work!