Yes, they're back. With a vengeance. Those pesky little buggers we call \vboxes which I've fought against previously. (And Bruno, too.)
\parskip=0pt
\def\unquo{\unvbox0\smallskip}
\def\bquo#{\smallskip\dimen255=\prevdepth\setbox0\vbox\bgroup\prevdepth=\dimen255
\narrower\noindent\strut\aftergroup\unquo\let\next= }
\hsize=20pc
Some text which goes on for a while, in fact, hopefully long enough to
produce a line break.
\bquo{A quote which goes on for a while, so long in fact, that I was hoping to
see a line break somewhere durin this ouote.}
And then some more text.
\bye

No! What is that space? Not the same amount as before the quote I can tell you that much. Sure you'll tell me \smallskipamount is 3pt plus 1pt minus 1pt, but that can't be 2pt. No way.
Halp. Please.

\unvbox0in\unquo. not tested, thus not formalized as an answer. – barbara beeton Jul 12 '12 at 17:12\strutbefore the\unvbox, but I guess what happens then is that the\strutcreates a new empty line. – morbusg Jul 12 '12 at 17:23