Description of problem:
dd if=/dev/zero of=testfile.txt bs=1 count=65537
x=`cat testfile.txt | cat -`
Does not hang for me on Fedora 20. ksh-20120801-17.fc20.x86_64.
This is just for a future reference so I don't forget to test this bug. In fact, there is different bug that was fixed upstream, but it has this regression. So when the fix for that other bug is backported, we will have to fix this too.