Does it run if you switch double& to double? If so, it's a lack of entry in the typemap to handle double&.

Update: I managed to get Inline::CPP installed (with a patch from a bug report), and confirmed that the problem is indeed that double& isn't handled. I was able to make the code work using the following:

int f(double a, double b, double c, SV* x, SV* y, SV* z) {
    int error = -2;
    SvUPGRADE(x,SVt_NV); SvNV_set(x,a+42); SvNOK_on(x); SvSETMAGIC(x);
    SvUPGRADE(y,SVt_NV); SvNV_set(y,b+42); SvNOK_on(y); SvSETMAGIC(y);
    SvUPGRADE(z,SVt_NV); SvNV_set(z,c+42); SvNOK_on(z); SvSETMAGIC(z);
    return error;
}
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It may also be possible to keep the original prototype by creating a typemap entry for double&.