I'll preface by saying I use the Railscasts textmate theme by Ryan Bates, which you can grab here:
Anyway, When my cursor is on the line above a line with embedded code, it looks like this:
Then, when I move my cursor over the line, it looks like this:
Do you see how the @ and the 't' in true are cut off? the line highlighting is also cut off.
The file type is HTML(rails).