BUG #4224: issue with LIMIT and ORDER BY

The following bug has been logged online:

Bug reference:      4224
Logged by:          Lawrence Cohan
Email address:      lawrencec@1shoppingcart.com
PostgreSQL version: 8.2.5
Operating system:   red hat 4.1.1-52
Description:        issue with LIMIT and ORDER BY
Details:

Following queries run FOREVER in PG if an index exists on the "id" column
which is a integer - serial and PKey on the table.

SELECT id FROM orders WHERE merchant_id = xxxxxx ORDER BY id DESC LIMIT 31
-- or 30, 29, 28, 27, 26, 25

or

SELECT id FROM clients WHERE merchant_id = XXXXXX ORDER BY id LIMIT 3 -- or
1, 2.

With different limits we get different results but  the queris are running
forever with DESC as well.
This is a serrios issue as PG documentation says that:

"When using LIMIT, it is important to use an ORDER BY clause that constrains
the result rows into a unique order. Otherwise you will get an unpredictable
subset of the query's rows. You might be asking for the tenth through
twentieth rows, but tenth through twentieth in what ordering?"