Media with WYSIWYG not converting media tags to markup
I was having this same problem and have solved it. My problem was not rendering the text in the correct format in the template. So if you are using a custom theme, .tpl or whatever you need to make sure you render it correctly. I had it like this:

&lt;?php print $node-&gt;field_main_body['und'][0]['value'] ;?&gt;


Changing this to proper rendering using field_view_field fixed it for me:

&lt;?php print render(field_view_field('node', $node, 'field_main_body', array('label'=&gt;'hidden'))) ;?&gt;


Hope that's helpful