Ticket #2665 (closed bug: fixed)
Sorry for not providing a more specific summary.
The following code hangs the 6.8.2 compiler:
data U a = U [a] [a]
row :: a -> U a row u = U (iterate (fmap id) u) (iterate (fmap id) u)
This is the entire program. Simpler versions seem to make the problem go away, although I haven't investigated in detail. I'm running without any special compiler options enabled.
I have a suspicion this may be related to the problem with the inliner described at http://www.haskell.org/ghc/docs/latest/html/users_guide/bugs.html#bugs-ghc.