gistfile1.diff

diff --git a/src/node.js b/src/node.js
index afc70bf..8417460 100644
--- a/src/node.js
+++ b/src/node.js
@@ -138,11 +138,10 @@ process.mixin = function() {
           if (target === d.value) {
             continue;
           }
-
           if (deep && d.value && typeof d.value === "object") {
             target[k] = process.mixin(deep,
               // Never move original objects, clone them
-              source[k] || (d.value.length != null ? [] : {})
+              target[k] || (d.value.length != null ? [] : {})
             , d.value);
           }
           else {
diff --git a/test/simple/test-process-mixin.js b/test/simple/test-process-mixin.js
index ca7bf95..87bbc75 100644
--- a/test/simple/test-process-mixin.js
+++ b/test/simple/test-process-mixin.js
@@ -43,4 +43,13 @@ process.mixin(true, target, {
 });
 
 assert.notStrictEqual(['bar'], target.foo);
-assert.deepEqual(['bar'], target.foo);
\ No newline at end of file
+assert.deepEqual(['bar'], target.foo); 
+
+// Test that nested literals are handled properly
+var sys= require('sys');
+var source= {a: 'x', b: {c:"d"}};
+var target= {b: {d:"e"}};
+var result=  process.mixin(true,  target,  source);  
+assert.equal(result.a, 'x')                                          
+assert.equal(result.b.c, 'd')                                          
+assert.equal(result.b.d, 'e')