In order to block quoted posts for 1.4.x you have to modify some core files to insert plugin hooks to make this work..

Line Numbers are from 1.4.13
In xmlhttp.php (line 540) and newreply.php (line 686) find:
PHP Code:
$quoted_post['message'] = $parser->parse_badwords($quoted_post['message']); 

And after it insert:
PHP Code:
$plugins->run_hooks_by_ref("parse_quoted_message", $quoted_post); 
