package 'categories' fails with HEAD

Hi all, some time ago I filed: https://github.com/ekmett/categories/issues/4 against the 'categories' library. But I cannot see what is wrong with the code. It also builds with older GHCs (though I should re-check with 7.8.3). So I conjecture this is a HEAD problem in GHC HEAD. It seems weird. Any ideas what this could be? Cheers, Gabor