Hi Wendie,
I can not duplicate same problem in my localhost, please try deactivate other plugins and switch to wordpress default theme, and test again.
If the problem still exists, here is a test site for you:
http://luo206.discover-wp.com/strange-empty-lines-in-html-output/
user/pass: xgren/111111
using view:
http://luo206.discover-wp.com/wp-admin/admin.php?page=views-editor&view_id=4
in section "Layout HTML/CSS/JS", use below codes:
... <!-- wpv-loop-start --><wpv-loop>[wpv-post-title]</wpv-loop><!-- wpv-loop-end --> ...
in front-end, it output HTML codes as below:
... <!-- wpv-loop-start -->Hello world!<!-- wpv-loop-end --> ...