Format contentEditable element as you type

I basically want to do something very simple: I want the user to type in a tweet, and after 140 characters, I want the text that will be cut off to be greyed out. Should be simple, right?

I'm using the contentEditable property for the formatting. On the keyup event, I check if the text is too long, and move the extra chars into a <span> if this is the case. However, the selection gets lost on the way.

I've already tried many things (including this), but nothing worked - can you help me? I guess it would help me the most if you could give a working example.

I took this on because I was interested. It's an annoyingly large amount of code, but that's just how it is. My new version doesn't use Rangy's saveSelection() but does use its cross-browser Range support for IE compatibility. It's too much code to post here, so I'll just link to the jsfiddle: http://jsfiddle.net/timdown/g7KJ5/9/

I emailed joey already, but give this a look:

https://gist.github.com/746962

I've tried a new approach now and this is what I came up with:

$.fn.softlimit = function(maxChars, wrapElement, wrapAttributes) {
    var lastHTML, that = this[0];

    setInterval(function() {
        //Only trigger on change
        if (lastHTML == that.innerHTML) return;
        lastHTML = that.innerHTML;

        // Save the selection
        var savedSel = rangy.saveSelection();

        // Strip HTML and extract rangy markers
        var markers = [ ], text = '', htmlPos = 0;

        function escapeForHTML(text) {
            return text.replace('&', '&amp;').replace('<', '&lt;').replace('>', '&gt;').replace('"', '&quot;');
        }

        function processNode(node) {
            if (node.nodeType == 3) 
                text += escapeForHTML(node.nodeValue);
            else if (node.nodeName == 'SPAN' && node.id && node.id.indexOf('selectionBoundary_') === 0)
                markers.push({ index: text.length, html: node.outerHTML });
            else
                for (var i = 0; i < node.childNodes.length; ++i)
                    processNode(node.childNodes[i]);
        }

        processNode(that);

        // Do formatting
        var getOffset, markerOffset = 0;

        if (text.length > maxChars) {
            var startTag = '<' + wrapElement + ' ' + wrapAttributes + '>';
            var endTag = '</' + wrapElement + '>';

            text = text.substr(0, maxChars) + startTag + text.substr(maxChars) + endTag;

            getOffset = function(index) {
                if (index > maxChars) return startTag.length;
                else return 0;
            };
        }
        else
            getOffset = function() { return 0; };

        // Re-inject markers
        for (var i = 0; i < markers.length; ++i) {
            var marker = markers[i];
            var index = marker.index + getOffset(marker.index) + markerOffset;

            text = text.substr(0, index) + marker.html + text.substr(index);
            markerOffset += marker.html.length;
        }

        that.innerHTML = text;

        // Restore the original selection 
        rangy.restoreSelection(savedSel);
    }, 20);

    return $(this);
};

Thanks to @Tim Down for the hint with the markers, that was the crucial clue!