--- a/langtools/src/share/classes/com/sun/tools/javac/comp/Flow.java	Tue May 27 18:57:44 2014 +0100
+++ b/langtools/src/share/classes/com/sun/tools/javac/comp/Flow.java	Tue May 27 22:26:53 2014 +0100
@@ -231,7 +231,8 @@
         }
     }
 
-    public List<Type> analyzeLambdaThrownTypes(Env<AttrContext> env, JCLambda that, TreeMaker make) {
+    public List<Type> analyzeLambdaThrownTypes(final Env<AttrContext> env,
+            JCLambda that, TreeMaker make) {
         //we need to disable diagnostics temporarily; the problem is that if
         //a lambda expression contains e.g. an unreachable statement, an error
         //message will be reported and will cause compilation to skip the flow analyis
@@ -239,7 +240,13 @@
         //related errors, which will allow for more errors to be detected
         Log.DiagnosticHandler diagHandler = new Log.DiscardDiagnosticHandler(log);
         try {
-            new AssignAnalyzer(log, syms, lint, names, enforceThisDotInit).analyzeTree(env);
+            new AssignAnalyzer(log, syms, lint, names, enforceThisDotInit) {
+                @Override
+                protected boolean trackable(VarSymbol sym) {
+                    return !env.info.scope.includes(sym) &&
+                           sym.owner.kind == MTH;
+                }
+            }.analyzeTree(env);
             LambdaFlowAnalyzer flowAnalyzer = new LambdaFlowAnalyzer();
             flowAnalyzer.analyzeTree(env, that, make);
             return flowAnalyzer.inferredThrownTypes;

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/langtools/test/tools/javac/flow/T8042741/A.java	Tue May 27 22:26:53 2014 +0100
@@ -0,0 +1,37 @@
+/*
+ * Copyright (c) 2014, Oracle and/or its affiliates. All rights reserved.
+ * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
+ *
+ * This code is free software; you can redistribute it and/or modify it
+ * under the terms of the GNU General Public License version 2 only, as
+ * published by the Free Software Foundation.
+ *
+ * This code is distributed in the hope that it will be useful, but WITHOUT
+ * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
+ * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
+ * version 2 for more details (a copy is included in the LICENSE file that
+ * accompanied this code).
+ *
+ * You should have received a copy of the GNU General Public License version
+ * 2 along with this work; if not, write to the Free Software Foundation,
+ * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ *
+ * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
+ * or visit www.oracle.com if you need additional information or have any
+ * questions.
+ */
+
+// str must be at absolute position greater than that of lambda
+// expression in PositionTest.java
+// padding..........................................................padding
+// padding..........................................................padding
+// padding..........................................................padding
+// padding..........................................................padding
+// padding..........................................................padding
+
+public class A {
+    public final String str;
+    {
+        str = "";
+    }
+}

--- /dev/null	Thu Jan 01 00:00:00 1970 +0000
+++ b/langtools/test/tools/javac/flow/T8042741/PositionTest.java	Tue May 27 22:26:53 2014 +0100
@@ -0,0 +1,62 @@
+/*
+ * Copyright (c) 2014, Oracle and/or its affiliates. All rights reserved.
+ * DO NOT ALTER OR REMOVE COPYRIGHT NOTICES OR THIS FILE HEADER.
+ *
+ * This code is free software; you can redistribute it and/or modify it
+ * under the terms of the GNU General Public License version 2 only, as
+ * published by the Free Software Foundation.
+ *
+ * This code is distributed in the hope that it will be useful, but WITHOUT
+ * ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or
+ * FITNESS FOR A PARTICULAR PURPOSE.  See the GNU General Public License
+ * version 2 for more details (a copy is included in the LICENSE file that
+ * accompanied this code).
+ *
+ * You should have received a copy of the GNU General Public License version
+ * 2 along with this work; if not, write to the Free Software Foundation,
+ * Inc., 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ *
+ * Please contact Oracle, 500 Oracle Parkway, Redwood Shores, CA 94065 USA
+ * or visit www.oracle.com if you need additional information or have any
+ * questions.
+ */
+
+/* @test
+ * @bug 8042741
+ * @summary Java 8 compiler throws NullPointerException depending location in source file
+ * @compile A.java PositionTest.java
+ */
+
+public class PositionTest extends A {
+    <E extends Exception> void test(SAM<E> r) throws E {
+        test(() -> { System.err.println(str); });
+    }
+    interface SAM<E extends Exception> {
+        public void run() throws E;
+    }
+    void f() {
+        try {
+            test(() -> {
+                    test(() -> {
+                            try {
+                                test(() -> { System.err.println(str); });
+                                System.err.println(str);
+                            } catch (Exception e) {}
+                            System.err.println(str);
+                        });
+                    System.err.println(str);
+                });
+        } catch (Exception e) { }
+    }
+    void g() throws Exception {
+        test(() -> {
+                try {
+                    try {
+                        test(() -> { System.err.println(str); });
+                    } catch (Exception e) {}
+                    System.err.println(str);
+                } catch (Exception e) {}
+                System.err.println(str);
+            });
+    }
+}