Your test compiles fine without applying the patch.

Sorry, I forgot explain when it happens.
If you have string overloading with this settings:
mbstring.internal_encoding = UTF-8
mbstring.func_overload = 2

then you have exception on "parse error: failed at `content: '—';".
Specifically, this row
mbstring.internal_encoding = UTF-8
causes parse error. With only
mbstring.func_overload = 2
parsing goes well.

The mbstring.func_overload ini setting can't be changed at run-time; also, I've run into systems where the mbstring extension isn't enabled.

How about prefixing strlen() and substr() calls with '_', and then adding these helper functions?

// mb_orig_strlen() and mb_orig_substr() only exist when mbstring.func_overload & 2 is true and the mbstring extension is loaded
if (function_exists('mb_orig_strlen')) {
 function _strlen($s) {
 return mb_orig_strlen($s);
 }
 function _substr() {
 return call_user_func_array('mb_orig_substr', func_get_args());
 }
} else {
 function _strlen($s) {
 return strlen($s);
 }
 function _substr() {
 return call_user_func_array('substr', func_get_args());
 }
}

The language itself doesn't use unicode so the parser doesn't need to be aware of it (no unicode keywords or anything). The buffer can be treated as a string of 8 bit chars and still have unicode characters pass through it fine. I'm guessing the problem is that mbstring.func_overload causes the string functions to work differently than the $buffer[x] character accessor which causes a mismatch and the parser to fail?

Does changing the ini setting with ini_set just for the parse work? If that doesn't work then another option is to replace all instances of $this->buffer[] with substr($this->buffer, ...). There's probably a noticeable performance hit to this change though.

Does changing the ini setting with ini_set just for the parse work?

Yes, you are right.. Changing compile method on this

 public function compile($string, $name = null) {
 $locale = setlocale(LC_NUMERIC, 0);
 setlocale(LC_NUMERIC, "C");
 $internal_encoding = NULL;
 // only if mbstring installed
 if (function_exists('mb_orig_strlen')) {
 $internal_encoding = ini_get('mbstring.internal_encoding');
 if(!is_null($internal_encoding)){
 ini_set('mbstring.internal_encoding', NULL);
 }
 }
 $this->parser = $this->makeParser($name);
 $root = $this->parser->parse($string);
 $this->env = null;
 $this->scope = null;
 $this->formatter = $this->newFormatter();
 if (!empty($this->registeredVars)) {
 $this->injectVariables($this->registeredVars);
 }
 $this->sourceParser = $this->parser; // used for error messages
 $this->compileBlock($root);
 ob_start();
 $this->formatter->block($this->scope);
 $out = ob_get_clean();
 setlocale(LC_NUMERIC, $locale);
 if(!is_null($internal_encoding)){
 ini_set('mbstring.internal_encoding', $internal_encoding);
 }
 return $out;
 }

helps and parsing is going well even if
mbstring.internal_encoding = UTF-8
is set in php.ini or .htaccess

Thanks for fix.