[Moved to DR at the October, 2012 meeting.]

Proposed resolution (February, 2012):

Change 13.10.3.4 [temp.deduct.conv] paragraph 1 as follows:

Template argument deduction is done by comparing the return type of the conversion function template (call it P; see 9.4 [dcl.init], 12.2.2.6 [over.match.conv], and 12.2.2.7 [over.match.ref] for the determination of that type) with the type that is required as the result of the conversion (call it A; see 9.4 [dcl.init], 12.2.2.6 [over.match.conv], and 12.2.2.7 [over.match.ref] for the determination of that type) as described in 13.10.3.6 [temp.deduct.type].

According to 13.10.3.4 [temp.deduct.conv] paragraph 1,

Template argument deduction is done by comparing the return type of the conversion function template (call it P; see 9.4 [dcl.init], 12.2.2.6 [over.match.conv], and 12.2.2.7 [over.match.ref] for the determination of that type) with the type that is required as the result of the conversion (call it A) as described in 13.10.3.6 [temp.deduct.type].

It would seem that the cross-references should apply to the determination of the type “required as the result of the conversion” (i.e., A) instead of the return type of the conversion function.