A better way to read text files into html?
What do you mean with the variable name wanted? I don't understand what it has anything to do with what you are doing, so it's a badly chosen name.

if( wanted[i] === "\n" )
    continue;


This won't do anything. Since you split by "\n", there will be no line breaks leftover. I assume you want wanted[i] === "". Also consider .trim()ing all you lines, otherwise a stray white space will break this.

if (i === (wanted.length-1) )
    {
        // [...]
        break;
    }// Break early because the rest cannot be processed correctly


I'm not sure why you are "breaking early" here. Your condition triggers for the last line, so it's not really "early".

newString += wanted[i];


Repeated string concatenation is a slow process and uses a lot of memory. Instead just leave your strings in the array and at the end just return wanted.join();

EDIT: One more thing: Both the original div and the other ul you later add inside have the same id. That's invalid.

EDIT: Regarding the ID: In your script you have $("#todoList").append( compiledData ); so there's obviouly an element with the id todoList, but your template has the code &lt;ul  id="todoList" class="workList"&gt; in it, so you are creating a second element with the same ID.