Years ago I did exactly this for an internal CMS. The preview window used the same renderer as the front end, and there were various dynamic controls the authors/editors could use to control content, reference other content, etc. The preview window would update as they typed and always look like the current styles. If someone went overboard with direct styling, it would be painfully obvious during review, since reviewers first saw the raw content.
The system also had a "cheat sheet" which would show technical writers all of the supported styles and snippets in both literal and rendered forms.
The text you are writing will be read on smartphones, tables, PCs, and TV. It will have different layouts, e.g. depending on screen size. Which one do you want to preview?
There's no way around thinking about your use-cases and you're not going to convince designers to not want to see what the end product actually looks like.
Stipulating that point, though, perhaps the solution is to keep designers at a higher level of granularity -- to have them produce designs for "large screen", "small screen", "mobile", "print", &c., including general ideas of how body text shall appear, but leave the more granular detail to someone who's not so much wedded to pixel-perfection, but instead understands that the same content will necessarily look different when differently rendered, and who can understand and accommodate those differences to produce a result that works well across all of them.
It is almost as funny as the request that a logo must use the "Pantone 1337" color. It probably is not representable in RGB and nobody has a color-calibrated screen.
Can I quote your response somewhere on my website to explain the idea of LIVEditor?!
The actual act of editing something by trying to manipulate its output representation is usually painful, which is why WYSIWYG sucks for anything but demos to people who buy software but don't have to use it. The one thing it does get right is live editing, but you don't have to do WYSIWYG to get live editing -- you can just have a splitscreen with a sane, editable, logical representation on one side and an instant preview on the other.