diff --git a/lisp/ChangeLog b/lisp/ChangeLog
index e6cf29a130b..5c063b9603b 100644
--- a/lisp/ChangeLog
+++ b/lisp/ChangeLog
@@ -1,3 +1,17 @@
+2011-06-30  Ken Manheimer  <ken.manheimer@gmail.com>
+
+	* allout.el (allout-yank-processing): Fix injection of extra space
+	between bullet and non-whitespace character in first topic when
+	pasting, ensuring that the actual spacing in the pasted topic
+	following the bullet char is preserved.  This extra space was
+	causing pasted encrypted topics to get a decrypted status even
+	when the content was actually still encrypted.  Now the decryption
+	status from before the paste is preserved.
+
+	(allout-flag-region): Set all allout overlays so they evaporate
+	when reduced to zero length (evanescent), to prevent overlay
+	leakage.
+
 2011-06-30  Glenn Morris  <rgm@gnu.org>
 
 	* w32-fns.el (w32-charset-info-alist): Declare.
diff --git a/lisp/allout.el b/lisp/allout.el
index 1d4d4a20e11..552f9461335 100644
--- a/lisp/allout.el
+++ b/lisp/allout.el
@@ -4605,8 +4605,7 @@ however, are left exactly like normal, non-allout-specific yanks."
                                         ; and delete residual subj
                                         ; prefix digits and space:
                      (while (looking-at "[0-9]") (delete-char 1))
-                     (if (looking-at " ")
-                         (delete-char 1))))
+                     (delete-char -1)))
                   ;; Assert new topic's bullet - minimal effort if unchanged:
                   (allout-rebullet-heading (string-to-char prefix-bullet)))
               (exchange-point-and-mark))))
@@ -4736,6 +4735,7 @@ arguments as this function, after the exposure changes are made."
   (when flag
     (let ((o (make-overlay from to nil 'front-advance)))
       (overlay-put o 'category 'allout-exposure-category)
+      (overlay-put o 'evaporate t)
       (when (featurep 'xemacs)
         (let ((props (symbol-plist 'allout-exposure-category)))
           (while props