Newtype deriving over phantom types broke between GHC 6.6.1 and GHC 6.8.1

Consider the following code:

{-# OPTIONS_GHC -fglasgow-exts -fallow-undecidable-instances #-}

data Lex

data Glex

newtype Monomial ord = M [Int] deriving (Eq,Show)

instance Ord (Monomial Lex) where
    compare (M xs) (M ys) = compare xs ys

instance Ord (Monomial Glex) where
    compare (M xs) (M ys) = compare (sum xs, xs) (sum ys, ys)

-- newtype Polynomial ord = P [Monomial ord] deriving (Eq,Show,Ord)

newtype Polynomial ord = P [Monomial ord] deriving (Eq,Show)

instance Ord (Monomial ord) => Ord (Polynomial ord) where
    compare (P ts) (P us) = compare ts us

In 6.6.1, it was permissible to derive the Ord instance for Polynomial ord from the ord instance for Monomial ord - the commented out code would compile. In 6.8.1-3, the commented out code doesn't compile, so you have to do the derivation by hand, as shown.