Pretty-print HTML via PHP without validation?
The behaviour that you've observed when using Tidy is a result of the underlying use of DOM API. Instead of manipulating the provided source code, DOM API will reconstruct the whole source, thus making fixes along the way.
I've written Dindent, which is a library that uses Regex. It does not do anything beyond adding the indentation and removing whitespaces. However, I advise against using this implementation beyond development purposes.
I've never used Tidy but it seems pretty customizable.
Here's the quick reference of configuration options: http://tidy.sourceforge.net/docs/quickref.html
But really, with tools like Firebug, I've never seen the need to Tidy HTML output.
Since you do not want to have it validate for whatever reason, I will not suggest htmlpurifier ; ). Why not just use an IDE to get everything indented nicely, like Alt-Shift-F in Netbeans.