I am having the same problem. The margin specifiers have been included (see code snippet) but I am unable to progress past step 3.

<style>
body {
font-family: sans-serif;
}
h1 {
font-family: fantasy;
}
#cloud-pic {
width: 100px;
float: left;
padding-right: 15px;
padding-left: 10px;
}
#cloud-sidebar {
background: rgb(255, 255, 219);
float: right;
width: 26%;
padding-right: 15px;
padding-left: 10px;
}
#cloud-text{
width: 62%;
padding-right: 70px;
padding-left: 15px;
}
</style>

I took a look at Challenge: Floating clouds, and was able to start over and complete it again. Here's how to complete step 3, for any folks looking at this in the future.

You just need to add a margin rule to the #cloud-pic and #cloud-sidebar. This rule could look like margin: 0 10px 10px 0; or something like that, as long as the values are between 3 and 15.

Hope that helps somebody!