I know it's not really an answer to the question but I'd try to avoid
wrapfigure altogether. There are two alternative packages called
picins. picins is often considered the successor of
picinpar but I don't like it personally. In its documentation the amount of bad typography is only surpassed by the number of drop shadow effects.
picinpar will not solve all your problems and it doesn't support any floating as the
L parameters to wrapfig do (as Stefan pointed out) but it will manage decent spacing, justification and possibilities to mitigate bad luck. You can (and must) pass the number of lines above the image as an argument. The syntax is a bit cryptic but the following example might illustrate its usage (sorry it's in German), as does the good package documentation.
If this doesn't help, try some related questions like How to wrap text around a figure? and wrapfigure cuts off images at the end of the page.