diff -r 0c588a96837c -r 0cde1379b29f src/compiler/SemanticAnalysis.cpp
--- a/src/compiler/SemanticAnalysis.cpp	Mon Nov 19 02:12:13 2012 -0800
+++ b/src/compiler/SemanticAnalysis.cpp	Thu Dec 20 00:59:38 2012 -0800
@@ -516,16 +516,23 @@
                 }
             }
 
-            // When we start overloading, coercion will have to happen later.
-            arg = coerce(arg, actual, Coerce_Arg);
-            if (!arg)
-                return;
+            if (actual->isReference()) {
+                // If the actual is a reference, the coercion rules are much
+                // stricter; the contained types must be identical.
+                // :TODO: make this not an assert
+                assert(ReferenceType::cast(actual)->contained() == arg->type());
+            } else {
+                // When we start overloading, coercion will have to happen later.
+                arg = coerce(arg, actual, Coerce_Arg);
+                if (!arg)
+                    return;
+            }
 
             mustComputeReference = actual->isReference() && !given->isReference();
         }
 
-        // :TODO: handle mustComputeReference
-        assert(!mustComputeReference);
+        if (mustComputeReference)
+            arg = new (pool_) HToRef(arg->node(), arg->type(), arg);
 
         if (!args->append(arg))
             return;
@@ -640,6 +647,7 @@
             return l;
     }
 
+    // :TODO: remove
     assert(l == r);
 
     return left->type();
@@ -741,8 +749,6 @@
             return NULL;
         return hir;
     }
-
-    assert(from == to);
     
     return hir;
 }