Game Mode: (Both)
Well, in the server i was playing in i made a chicken farm and my chickens kept dying, so i went to single player (Not modded) with 1.5 and also tried in 1.5.1 and made the chicken farm basically there's about "100" chickens in a 1x1 fenced-in space.
To reproduce the error, you need to make sure the chickens are going everywhere so to do this, spawn the 100 chickens and then just jump in where the chicken are and they will go all over the place, then just look at chickens, save the world, log back in and they will start to suffocate through the walls.
This issue didn't happen on 1.4.7
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Duplicate of MC-2025.

Sorry for the duplicate.
Also tested a little with less chickens.
For this to work you put 10 chickens and 10 baby chickens and it will happen, the reason being for me to use 1x1 area is because its an automated one, but this didn't happen to me on 1.4.7 also happens when leaving the area and coming back.
1) 100 entities should not occupy one space, and if you try to walk into an entity, it get's pushed. So, yeah.
2) A bigger fence and a small plot of land does the trick...?