Normalize types bottom up. Fixes #20666.

src/librustc/middle/traits/project.rs

@@ -206,6 +206,7 @@ impl<'a,'b,'tcx> TypeFolder<'tcx> for AssociatedTypeNormalizer<'a,'b,'tcx> {
         // normalize it when we instantiate those bound regions (which
         // should occur eventually).
 
+        let ty = ty_fold::super_fold_ty(self, ty);
         match ty.sty {
             ty::ty_projection(ref data) if !data.has_escaping_regions() => { // (*)
 
@@ -229,8 +230,9 @@ impl<'a,'b,'tcx> TypeFolder<'tcx> for AssociatedTypeNormalizer<'a,'b,'tcx> {
                 self.obligations.extend(obligations.into_iter());
                 ty
             }
+
             _ => {
-                ty_fold::super_fold_ty(self, ty)
+                ty
             }
         }
     }

src/test/run-pass/associated-types-nested-projections.rs

@@ -0,0 +1,51 @@
+// Copyright 2015 The Rust Project Developers. See the COPYRIGHT
+// file at the top-level directory of this distribution and at
+// http://rust-lang.org/COPYRIGHT.
+//
+// Licensed under the Apache License, Version 2.0 <LICENSE-APACHE or
+// http://www.apache.org/licenses/LICENSE-2.0> or the MIT license
+// <LICENSE-MIT or http://opensource.org/licenses/MIT>, at your
+// option. This file may not be copied, modified, or distributed
+// except according to those terms.
+
+// Test that we can resolve nested projection types. Issue #20666.
+
+use std::slice;
+
+trait Bound {}
+
+impl<'a> Bound for &'a int {}
+
+trait IntoIterator {
+    type Iter: Iterator;
+
+    fn into_iter(self) -> Self::Iter;
+}
+
+impl<'a, T> IntoIterator for &'a [T; 3] {
+    type Iter = slice::Iter<'a, T>;
+
+    fn into_iter(self) -> slice::Iter<'a, T> {
+        self.iter()
+    }
+}
+
+fn foo<X>(x: X) where
+    X: IntoIterator,
+    <<X as IntoIterator>::Iter as Iterator>::Item: Bound,
+{
+}
+
+fn bar<T, I, X>(x: X) where
+    T: Bound,
+    I: Iterator<Item=T>,
+    X: IntoIterator<Iter=I>,
+{
+
+}
+
+fn main() {
+    foo(&[0i, 1, 2]);
+    //~^ error: the trait `Bound` is not implemented for the type `<<&[int; 3] as IntoIterator>::Iter as core::iter::Iterator>::Item`
+    bar(&[0i, 1, 2]);
+}