diff --git a/lib/compress.js b/lib/compress.js
index 918e7ba2..6f9d460c 100644
--- a/lib/compress.js
+++ b/lib/compress.js
@@ -5148,7 +5148,7 @@ merge(Compressor.prototype, {
         return self;
     });
 
-    function is_reachable(node, defs) {
+    function is_reachable(self, defs) {
         var reachable = false;
         var find_ref = new TreeWalker(function(node) {
             if (reachable) return true;
@@ -5158,7 +5158,7 @@ merge(Compressor.prototype, {
         });
         var scan_scope = new TreeWalker(function(node) {
             if (reachable) return true;
-            if (node instanceof AST_Scope) {
+            if (node instanceof AST_Scope && node !== self) {
                 var parent = scan_scope.parent();
                 if (!(parent instanceof AST_Call && parent.expression === node)) {
                     node.walk(find_ref);
@@ -5166,7 +5166,7 @@ merge(Compressor.prototype, {
                 return true;
             }
         });
-        node.walk(scan_scope);
+        self.walk(scan_scope);
         return reachable;
     }
 
@@ -5183,7 +5183,7 @@ merge(Compressor.prototype, {
                 parent = compressor.parent(level++);
                 if (parent instanceof AST_Exit) {
                     if (in_try(level, parent instanceof AST_Throw)) break;
-                    if (is_reachable(self, [ def ])) break;
+                    if (is_reachable(def.scope, [ def ])) break;
                     if (self.operator == "=") return self.right;
                     return make_node(AST_Binary, self, {
                         operator: self.operator.slice(0, -1),
diff --git a/lib/output.js b/lib/output.js
index 47d07678..e43cbc9a 100644
--- a/lib/output.js
+++ b/lib/output.js
@@ -699,9 +699,7 @@ function OutputStream(options) {
         }
     };
 
-    PARENS(AST_Node, function(){
-        return false;
-    });
+    PARENS(AST_Node, return_false);
 
     // a function expression needs parens around it when it's provably
     // the first token to appear in a statement.
diff --git a/package.json b/package.json
index 767814be..a64c8039 100644
--- a/package.json
+++ b/package.json
@@ -4,7 +4,7 @@
   "homepage": "https://github.com/mishoo/UglifyJS2/tree/harmony",
   "author": "Mihai Bazon <mihai.bazon@gmail.com> (http://lisperator.net/)",
   "license": "BSD-2-Clause",
-  "version": "3.3.3",
+  "version": "3.3.4",
   "engines": {
     "node": ">=0.8.0"
   },
diff --git a/test/compress/dead-code.js b/test/compress/dead-code.js
index 425ae1ec..f571c360 100644
--- a/test/compress/dead-code.js
+++ b/test/compress/dead-code.js
@@ -1074,3 +1074,29 @@ issue_2666: {
     }
     expect_stdout: "object"
 }
+
+issue_2692: {
+    options = {
+        dead_code: true,
+        reduce_vars: false,
+    }
+    input: {
+        function f(a) {
+            return a = g;
+            function g() {
+                return a;
+            }
+        }
+        console.log(typeof f()());
+    }
+    expect: {
+        function f(a) {
+            return a = g;
+            function g() {
+                return a;
+            }
+        }
+        console.log(typeof f()());
+    }
+    expect_stdout: "function"
+}