Hello Charles, I upgraded to the latest Emacs and org-mode versions, but then I found out that the text does reformat correctly if I position the cursor at the beginning of the SRC block (that is, on the first `#') and enter a newline (or, alternatively, if I close and reopen the file). I have no idea why you need to do that in order to have org-mode recognize that it should use a code syntax, but it works.
thanks for all your help! best giuseppe -- Giuseppe Pagnoni Dip. Scienze Biomediche, Metaboliche e Neuroscienze Sezione Fisiologia e Neuroscienze Univ. di Modena e Reggio Emilia Via Campi 287 I-41125 Modena, Italy Tel: +39-059-205-5742 Fax: +39-059-205-5363