Long story short: delegate combining is all messed up with respect to variance. We discovered this late in the cycle. We’re working with the CLR team to see if we can come up with some way to make all the common scenarios work without breaking backwards compatibility, and so on, but whatever we come up with will probably not make it into the 4.0 release. Hopefully we’ll get it all sorted out in some service pack. I apologize for the inconvenience.