On the several 5.8.x versions of Perl that I had handy none of which were 5.8.8 and none of which were on Solaris, I was unable to reproduce the problem so I can't test my fix. However, I suspect the following would fix the problem:

sub file_contents
{
  local @ARGV = $FILE;
  local $/;
  my $contents = <>;
  close ARGV;   # Make EOF more obvious to Solaris Perl 5.8.8
  return $contents;
}
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The problem isn't how you are writing to the files. It seems clear that the problem is that the *ARGV file handle isn't being fully closed between the first and second round. Otherwise, it makes no sense to have just the second line read.