mark_safe not working/still escaping in simple_tag

I'm using Django 1.3 and I have a simple_tag that I need to return some un-escaped HTML and no matter what I do it's still escaping my & to & and my | to %7C.

from django import template
from django.template import loader, Context
from django.utils.safestring import mark_safe

register = template.Library()

@register.simple_tag()
def show_stuff(arg1=None, arg2=None, arg3='someconstant'):

    # Do some stuff

    if someconstant == 'somevalue':
        template_name = 'template1.html'
    else:
        template_name = 'template2.html'

    template = loader.get_template(template_name)
    html = template.render(Context( {'myvar': myvar,} ))
    html = mark_safe(html)
    print type(html)
    return html

The print statement reveals

<class 'django.utils.safestring.SafeUnicode'>

which from my understanding isn't supposed to be escaped. I'm calling the tag in my template like so:

{% show_stuff 'arg1' 'arg2' 'arg3' %}

Help would be greatly appreciated.

Update: Tried the following from comments below. Didn't return an error, but still escapes the HTML:

    ...
    template = loader.get_template(template_name)
    html = template.render(Context( {'myvar': myvar,} ))
    html = mark_safe(html)
    print type(html)
    return html
show_stuff().is_safe=True

Also tried wrapping the contents of template1.html and template2.html in

{% autoescape off %}
template html contents with & and |
{% endautoescape %}

and wrapping the templatetag call itself with autoescape tags. No success.