Looks like Jon would have to make some changes to the BB Code for this to work. Otherwise, all you have to do is simply copy and paste the "embed" code that is supplied for the youtube video.
Like this...
<object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/Z_x9JjckaHU&rel=0&color1=0xd6d6d6&color2=0xf0f0f0&border=0"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/Z_x9JjckaHU&rel=0&color1=0xd6d6d6&color2=0xf0f0f0&border=0" type="application/x-shockwave-flash" wmode="transparent" width="425" height="355"></embed></object>