Why are you nesting your SKIP blocks? (I know, "because merlyn did it" -- that alone is insufficient reason) It appears that if a skip happens, you just skip all the way to the end. The only thing SKIP blocks are used for is Test::More's skip function, which just does some accounting and then last SKIP.

The code you posted is equivalent to this code:

# $mech is a previously-intitlized WWW::Mechanize 
# instance currently holding the page I want to test
SKIP: {
  ok( $mech->response->is_success, "Request is successful" )
    or skip "Unsuccessful request", 4;
  # ignoring repeated is_html test in original post      
  ok( $mech->is_html, "Returns HTML" )
    or skip "Didn't return HTML", 3;
  ok( $mech->title eq 'some title', 
    "Returns expected title" );

  my @forms = $mech->forms;
  ok( @forms >= 1, "Has at least one form" )
    or skip "Need at least one form to work on", 1;
  my ($passwd_form) = @forms;
  ok( $passwd_form->action eq 'example.cgi',
     "action goes to correct CGI" );
}
[download]