diff --git a/hy/compiler.py b/hy/compiler.py
index 7294008..d97df00 100644
--- a/hy/compiler.py
+++ b/hy/compiler.py
@@ -27,6 +27,8 @@ from hy.models.symbol import HySymbol
 from hy.models.list import HyList
 from hy.models.dict import HyDict
 
+from hy.util import flatten_literal_list
+
 import ast
 import sys
 
@@ -63,23 +65,18 @@ class HyASTCompiler(object):
 
     def _mangle_branch(self, tree):
         ret = []
+        tree = list(flatten_literal_list(tree))
         tree.reverse()
 
         if self.returnable and len(tree) > 0:
             el = tree[0]
-            if not isinstance(el, (ast.stmt, list)):
+            if not isinstance(el, ast.stmt):
                 el = tree.pop(0)
                 ret.append(ast.Return(value=el,
                                       lineno=el.lineno,
                                       col_offset=el.col_offset))
 
         for el in tree:
-            if type(el) == list:
-                blob = self._mangle_branch(el)
-                blob.reverse()
-                ret += blob
-                continue
-
             if isinstance(el, ast.stmt):
                 ret.append(el)
                 continue
diff --git a/hy/util.py b/hy/util.py
new file mode 100644
index 0000000..f2ffdf1
--- /dev/null
+++ b/hy/util.py
@@ -0,0 +1,28 @@
+# Copyright (c) 2013 Paul Tagliamonte <paultag@debian.org>
+#
+# Permission is hereby granted, free of charge, to any person obtaining a
+# copy of this software and associated documentation files (the "Software"),
+# to deal in the Software without restriction, including without limitation
+# the rights to use, copy, modify, merge, publish, distribute, sublicense,
+# and/or sell copies of the Software, and to permit persons to whom the
+# Software is furnished to do so, subject to the following conditions:
+#
+# The above copyright notice and this permission notice shall be included in
+# all copies or substantial portions of the Software.
+#
+# THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
+# IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
+# FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.  IN NO EVENT SHALL
+# THE AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
+# LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING
+# FROM, OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER
+# DEALINGS IN THE SOFTWARE.
+
+
+def flatten_literal_list(entry):
+    for e in entry:
+        if type(e) == list:
+            for x in flatten_literal_list(e):
+                yield x  # needs more yield-from
+        else:
+            yield e
diff --git a/tests/native_tests/language.hy b/tests/native_tests/language.hy
index 79fa344..153f548 100644
--- a/tests/native_tests/language.hy
+++ b/tests/native_tests/language.hy
@@ -223,15 +223,17 @@
   (with-as (open "README.md" "r") fd
            (pass)))
 
+
 (defn test-for-doodle []
   "NATIVE: test for-do"
-  (setf (, x y) (, 0 0))
+  (do (do (do (do (do (do (do (do (do (setf (, x y) (, 0 0)))))))))))
   (foreach [- [1 2]]
            (do
              (setf x (+ x 1))
              (setf y (+ y 1))))
   (assert (= y x 2)))
 
+
 (defn test-comprehensions []
   "NATIVE: test list comprehensions"
   (assert (= (list-comp (* x 2) (x (range 2))) [0 2]))
@@ -241,6 +243,7 @@
   (assert (= (list-comp (, x y) (x (range 2) y (range 2)))
              [(, 0 0) (, 0 1) (, 1 0) (, 1 1)])))
 
+
 (defn test-defn-order []
   "NATIVE: test defn evaluation order"
   (setv acc [])
@@ -251,12 +254,14 @@
   (my-fun)
   (assert (= acc ["Foo" "Bar" "Baz"])))
 
+
 (defn test-defn-return []
   "NATIVE: test defn return"
   (defn my-fun [x]
     (+ x 1))
   (assert (= 43 (my-fun 42))))
 
+
 (defn test-defn-do []
   "NATIVE: test defn evaluation order with do"
   (setv acc [])
@@ -268,6 +273,7 @@
   (my-fun)
   (assert (= acc ["Foo" "Bar" "Baz"])))
 
+
 (defn test-defn-do-return []
   "NATIVE: test defn return with do"
   (defn my-fun [x]