This won't help you much, but it might help you to understand what's happening.
This is a quote from Eric Meyers book:
"Although floating elements are removed from the normal flow of the document, they do affect the layout of content within the document. This is effectively done by increasing the padding within any following elements on those lines which are next to a floating element. However this means that the backgrounds and borders of any element will extend "underneath" the floated element, and possibly past the other side of the floated element. This behaviour ensures that all element boxes will remain rectangular, but it can lead to unwanted effects. "
Therefore to effect any change on your paragraphs you will need to make padding that is at least as wide as your image before any effect will show. However this will also stop the text flowing under the image as it will now have padding that is wider than the image.
I think your only solution is to forget about text wrapping underneath the image (especially if you want borders around it) and set the headings and paragraphs to have a left margin of say 170px then they will keep the format that you have set with the padding. Then you can get rid of those inline blocks and have a page that works in all compliant browsers.
(If you want text (without borders) to flow to the side and underneath your image you will just have to do without the indentation on the headings.)