--- a/src/jdk/nashorn/internal/codegen/Lower.java	Wed Jul 03 13:41:18 2013 -0300
+++ b/src/jdk/nashorn/internal/codegen/Lower.java	Thu Jul 04 14:10:18 2013 +0200
@@ -32,6 +32,7 @@
 import java.util.ArrayList;
 import java.util.Arrays;
 import java.util.List;
+import java.util.ListIterator;
 import jdk.nashorn.internal.ir.BaseNode;
 import jdk.nashorn.internal.ir.BinaryNode;
 import jdk.nashorn.internal.ir.Block;
@@ -115,6 +116,21 @@
                 }
                 return newStatements;
             }
+
+            @Override
+            protected Block afterSetStatements(final Block block) {
+                final List<Statement> stmts = block.getStatements();
+                for(final ListIterator<Statement> li = stmts.listIterator(stmts.size()); li.hasPrevious();) {
+                    final Statement stmt = li.previous();
+                    // popStatements() guarantees that the only thing after a terminal statement are uninitialized
+                    // VarNodes. We skip past those, and set the terminal state of the block to the value of the
+                    // terminal state of the first statement that is not an uninitialized VarNode.
+                    if(!(stmt instanceof VarNode && ((VarNode)stmt).getInit() == null)) {
+                        return block.setIsTerminal(this, stmt.isTerminal());
+                    }
+                }
+                return block.setIsTerminal(this, false);
+            }
         });
     }
 
@@ -132,11 +148,11 @@
         //now we have committed the entire statement list to the block, but we need to truncate
         //whatever is after the last terminal. block append won't append past it
 
-        Statement last = lc.getLastStatement();
 
         if (lc.isFunctionBody()) {
             final FunctionNode currentFunction = lc.getCurrentFunction();
             final boolean isProgram = currentFunction.isProgram();
+            final Statement last = lc.getLastStatement();
             final ReturnNode returnNode = new ReturnNode(
                 last == null ? block.getLineNumber() : last.getLineNumber(), //TODO?
                 currentFunction.getToken(),
@@ -145,11 +161,7 @@
                     compilerConstant(RETURN) :
                     LiteralNode.newInstance(block, ScriptRuntime.UNDEFINED));
 
-            last = (Statement)returnNode.accept(this);
-        }
-
-        if (last != null && last.isTerminal()) {
-            return block.setIsTerminal(lc, true);
+            returnNode.accept(this);
         }
 
         return block;

--- a/src/jdk/nashorn/internal/ir/BlockLexicalContext.java	Wed Jul 03 13:41:18 2013 -0300
+++ b/src/jdk/nashorn/internal/ir/BlockLexicalContext.java	Thu Jul 04 14:10:18 2013 +0200
@@ -29,7 +29,6 @@
 import java.util.ArrayList;
 import java.util.Deque;
 import java.util.List;
-import java.util.ListIterator;
 
 /**
  * This is a subclass of lexical context used for filling
@@ -63,6 +62,16 @@
         return sstack.pop();
     }
 
+    /**
+     * Override this method to perform some additional processing on the block after its statements have been set. By
+     * default does nothing and returns the original block.
+     * @param block the block to operate on
+     * @return a modified block.
+     */
+    protected Block afterSetStatements(Block block) {
+        return block;
+    }
+
     @SuppressWarnings("unchecked")
     @Override
     public <T extends LexicalContextNode> T pop(final T node) {
@@ -70,6 +79,7 @@
         if (node instanceof Block) {
             final List<Statement> newStatements = popStatements();
             expected = (T)((Block)node).setStatements(this, newStatements);
+            expected = (T)afterSetStatements((Block)expected);
             if (!sstack.isEmpty()) {
                 lastStatement = lastStatement(sstack.peek());
             }
@@ -107,10 +117,7 @@
     }
 
     private static Statement lastStatement(final List<Statement> statements) {
-        for (final ListIterator<Statement> iter = statements.listIterator(statements.size()); iter.hasPrevious(); ) {
-            final Statement node = iter.previous();
-            return node;
-        }
-        return null;
+        final int s = statements.size();
+        return s == 0 ? null : statements.get(s - 1);
     }
 }

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/test/script/basic/JDK-8019809.js	Thu Jul 04 14:10:18 2013 +0200
@@ -0,0 +1,37 @@
+/*
+ * Copyright (c) 2010, 2013, Oracle and/or its affiliates. All rights reserved.
+ * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
+ * 
+ * This code is free software; you can redistribute it and/or modify it
+ * under the terms of the GNU General Public License version 2 only, as
+ * published by the Free Software Foundation.
+ * 
+ * This code is distributed in the hope that it will be useful, but WITHOUT
+ * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
+ * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
+ * version 2 for more details (a copy is included in the LICENSE file that
+ * accompanied this code).
+ * 
+ * You should have received a copy of the GNU General Public License version
+ * 2 along with this work; if not, write to the Free Software Foundation,
+ * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ * 
+ * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
+ * or visit www.oracle.com if you need additional information or have any
+ * questions.
+ */
+
+/**
+ * JDK-8019809: Break return combo that generates erroneous bytecode
+ *
+ * @test
+ * @run
+ */
+
+//Function("L: {break L;return; }"); 
+
+function f() {
+    L: { break L; return; }
+}
+
+f();

--- a/test/script/currently-failing/JDK-8019809.js	Wed Jul 03 13:41:18 2013 -0300
+++ /dev/null	Thu Jan 01 00:00:00 1970 +0000
@@ -1,37 +0,0 @@
-/*
- * Copyright (c) 2010, 2013, Oracle and/or its affiliates. All rights reserved.
- * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
- * 
- * This code is free software; you can redistribute it and/or modify it
- * under the terms of the GNU General Public License version 2 only, as
- * published by the Free Software Foundation.
- * 
- * This code is distributed in the hope that it will be useful, but WITHOUT
- * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
- * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
- * version 2 for more details (a copy is included in the LICENSE file that
- * accompanied this code).
- * 
- * You should have received a copy of the GNU General Public License version
- * 2 along with this work; if not, write to the Free Software Foundation,
- * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
- * 
- * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
- * or visit www.oracle.com if you need additional information or have any
- * questions.
- */
-
-/**
- * JDK-8019809: Break return combo that generates erroneous bytecode
- *
- * @test
- * @run
- */
-
-//Function("L: {break L;return; }"); 
-
-function f() {
-    L: { break L; return; }
-}
-
-f();