I'm telling you the whole story (though obviously some piece of information is missing...
So, here's the output of 'perl -v'. I'm running on RedHat 7.3

This is perl, v5.6.1 built for i686-linux

Copyright 1987-2001, Larry Wall

Perl may be copied only under the terms of either the Artistic License
+ or the
GNU General Public License, which may be found in the Perl 5 source ki
+t.

Complete documentation for Perl, including FAQ lists, should be found 
+on
this system using `man perl' or `perldoc perl'.  If you have access to
+ the
Internet, point your browser at http://www.perl.com/, the Perl Home Pa
+ge.
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The other thing I noticed is in the output you posted, perl sees '>x7 <', while in my output, perl sees '>x <'
Not only that, but the PV is different: 'x\0227 ' vs 'x\227 "\0'. It seems like Perl is treating your input as hex 022 followed by the numeral 7 and a space? Whereas Perl is treating my input as hex 227 followed by a space?

Uh-oh, I figured out the 'g' problem: I had 'use Diagnostics' in there for a while. I pasted my little script in and deleted lines that were commented out and apparently this one wasn't. So, here the exact script and output (still freezes):

$ more tmp.pl
#!/usr/local/bin/perl -w

use utf8;

use Devel::Peek;

while (<STDIN>)
{
          print ">$_<\n";
          Dump($_);
          s/\d //;
          print "hi\n";
}

$ printf "x\0227  " | tmp.pl
>x  <
SV = PV(0x80f4b84) at 0x80f4858
  REFCNT = 1
  FLAGS = (POK,pPOK)
  PV = 0x80ff148 "x\227  "\0
  CUR = 4
  LEN = 80
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