It appears as though there might be a gap in the lexical scoping implementation in the compiler:
(ps (lambda (x) (let ((x 1)) (foo x)) (incf x))) => "function (x) { var x = 1; foo(x); return ++x; };"
vs.
(ps (let ((x 10)) (let ((x 1)) (foo x)) (incf x)))
"var x = 10; var x33 = 1; foo(x33); ++x;"
Although function parameters have their own lexical bindings, the environment still needs to be informed of those bindings so that LET forms in the function body can rename any conflicts.
Scott