A DESCRIPTION OF THE PROBLEM :
This is basically a clone of JDK-4140318. It appears the test code was understood incorrectly and therefore the evalutation was incorrect.

The return value of Reader.ready() is described as:
"True if the next read() is guaranteed not to block for input"

However, if a call to LineNumberReader.read() just compressed \r\n (i.e. skipLF was set to true) then ready() will incorrectly return true even though a subsequent call to read() may block.
The reason for this is that if read() encounters a \n it will discard it, since it has been compressed and therefore will try to read a second character.