OK I finally got my head out of my backside and figured it out -- at least for Perl 5.8. Here is the patch I'll be submitting to Ben:

41,42c41,42
<     my $fh = *{ $self->{fh} };
<     print $fh $self->{output}->(@_);
---
>     open FH, ">&", \*{ $self->{fh} }; # dup to avoid potential STDOU
+T recursion
>     print FH $self->{output}->(@_);
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