Now that we're using LLVM 2.5, we can stop always running the CFGSimplification pass. The pass was originally added as a workaround for a LLVM 2.4 bug where debug info would reference labels that have been optimized away.

void test(void delegate() spam)
{
    static void foo() // static is the problem
    {
        uint x;
        void peek() { x = 0; }
    }

    void bar()
    {
        spam();
    }
}