https://github.com/SitePen/dgrid/issues/642

fix-observe-handle.diff

diff --git a/List.js b/List.js
index f67f08f..84f2a0a 100644
--- a/List.js
+++ b/List.js
@@ -467,6 +467,7 @@ function(kernel, declare, listen, has, miscUtil, TouchScroll, hasClass, put){
   				from != to && firstRow && self.adjustRowIndices(firstRow);
 					self._onNotification(rows, object, from, to);
 				}, true)) - 1;
+				beforeNode.observerIndex = observerIndex;
 			}
 			var rowsFragment = document.createDocumentFragment();
 			// now render the results
diff --git a/OnDemandList.js b/OnDemandList.js
index 96041e8..38b3e15 100644
--- a/OnDemandList.js
+++ b/OnDemandList.js
@@ -336,17 +336,17 @@ return declare([List, _StoreMixin], {
 						break;
 					}
 					var nextRow = row[traversal]; // have to do this before removing it
-					var lastObserverIndex, currentObserverIndex = row.observerIndex;
-					if(currentObserverIndex != lastObserverIndex && lastObserverIndex > -1){
+					var currentObserverIndex = row.observerIndex, 
+						nextObserverIndex = nextRow ? nextRow.observerIndex : -1;
+					if(currentObserverIndex != nextObserverIndex){
 						// we have gathered a whole page of observed rows, we can delete them now
 						var observers = grid.observers; 
-						var observer = observers[lastObserverIndex]; 
+						var observer = observers[currentObserverIndex]; 
 						observer && observer.cancel();
-						observers[lastObserverIndex] = 0; // remove it so we don't call cancel twice
+						observers[currentObserverIndex] = 0; // remove it so we don't call cancel twice
 					}
 					reclaimedHeight += rowHeight;
 					count += row.count || 1;
-					lastObserverIndex = currentObserverIndex;
 					// we just do cleanup here, as we will do a more efficient node destruction in the setTimeout below
 					grid.removeRow(row, true);
 					toDelete.push(row);