I needed to have a blank line separating the first line of text and the start of the list:
$ cat file.rb
class Foo
# Returns "foo", which consists of the letters:
#
# * f
# * o
# * o
def method; "foo"; end
end
which produces:
<div class="discussion">
<p>Returns "foo", which consists of the letters:</p>
<ul>
<li>f</li>
<li>o</li>
<li>o</li>
</ul>
</div>