FULL PRODUCT VERSION :
java version "1.7.0_01"
Java(TM) SE Runtime Environment (build 1.7.0_01-b08)
Java HotSpot(TM) 64-Bit Server VM (build 21.1-b02, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Microsoft Windows [Version 6.0.6002]

A DESCRIPTION OF THE PROBLEM :
In the following code snippet

List<Set<? extends String>> a = null;
List<? extends Set<? extends String>> b = a; // 1

List<? extends Set<? extends String>> c = null;
List<Set<? extends String>> d = (List<Set<? extends String>>)c; // 2

(1) compiles but the reverse (2) doesn't compile.

This example is due to Remi Forax, who reduced the original sample I had posted to http://mail.openjdk.java.net/pipermail/compiler-dev/2011-December/003894.html.

REGRESSION. Last worked in version 6u29

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
Attempt to compile the following class under Java 7:

import java.util.List;
import java.util.Set;

public class Demo {
  public static void main(String[] args) {
    List<Set<? extends String>> a = null;
    List<? extends Set<? extends String>> b = a;

    List<? extends Set<? extends String>> c = null;
    List<Set<? extends String>> d = (List<Set<? extends String>>)c;
  }
}

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Should compile.
ACTUAL -
Fails to compile with:

Demo.java:10: error: inconvertible types
    List<Set<? extends String>> d = (List<Set<? extends String>>)c;
                                                                 ^
  required: List<Set<? extends String>>
  found: List<CAP#1>
  where CAP#1 is a fresh type-variable:
    CAP#1 extends Set<? extends String> from capture of ? extends Set<? extends
String>
1 error

ERROR MESSAGES/STACK TRACES THAT OCCUR :
See "actual result".

REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
import java.util.List;
import java.util.Set;

public class Demo {
  public static void main(String[] args) {
    List<Set<? extends String>> a = null;
    List<? extends Set<? extends String>> b = a;

    List<? extends Set<? extends String>> c = null;
    List<Set<? extends String>> d = (List<Set<? extends String>>)c;
  }
}
---------- END SOURCE ----------

CUSTOMER SUBMITTED WORKAROUND :
Perform the cast in a separate method, as in the following sample:

import java.util.List;
import java.util.Set;

public class Demo {
  public static void main(String[] args) {
    List<Set<? extends String>> a = null;
    List<? extends Set<? extends String>> b = a;

    List<? extends Set<? extends String>> c = null;
    List<Set<? extends String>> d = castToSpecific(c);
  }
  
  static <T> List<T> castToSpecific(List<? extends T> input) {
    return (List<T>) input;
  }
}