Hm... I use Microsoft Word, and it works fine if I just copy and paste it WITHOUT using the tinyMCE editor (which now works again). Word and tinyMCE do not seem to get along, so I just paste it as plain text and add in my own formatting if I want something italicized, bolded, or centered. It keeps my paragraphs, though. I don't indent my fanfics; I just put a line of white space between each paragraph, and it keeps that.
Try this...
1. Go to Account Info on AC and click Edit Preferences
2. Make sure "Use tinyMCE WYSWYG editor" is not checked.
3. Open your story in Word and make sure you have a line of white space (enter) between each paragraph.
4. Copy and paste your chapter into AC. It should paste as plain text, with no formatting.
5. Post it and see if it keeps your paragraphs.
I can't imagine why that wouldn't work, but let us know if you're still having problems.