Ralf,
The problem is the type-scheme polymorphic result type of castItem which is consumed by a type-variable polymorphic but type-class bounded argument type of process.
Thanks for your explanation: I hope it's still safe to say that I did not miss something entirely obvious. :) Anyway, indeed, I do see bubbling that one type-class constraint to the top-level. So, playing around, rewriting things just a little, I end up with instance IsProcessor p (Processor p) where process = Processor . unwrap . processItem which is disappointingly the most obvious implementation anyway. Disappointingly, however, because it equivalent to what I had written in the original program, i.e., the one that brought me to consider all this in the first place. And there, for some reason, it did not work and led me to the deviation via (something equivalent to) castItem. Well, that's what you get from simplifying stuff. Anyway, it seems time to have another look at the original program and maybe come with another type-checking puzzle later. ;) Thanks, Stefan http://www.cs.uu.nl/~stefan/