Here is the output from verbose mode. I know this used to work for me before but now this happens. I've tried it with other packages and got the same result.
$ sudo cabal install test-framework-quickcheck2 -v
/usr/local/bin/ghc --numeric-version
looking for package tool: ghc-pkg near compiler in /usr/local/bin
found package tool in /usr/local/bin/ghc-pkg
/usr/local/bin/ghc-pkg --version
/usr/bin/gcc -dumpversion
/usr/local/bin/ghc -c /tmp/412.c -o /tmp/412.o
/usr/bin/ld -x -r /tmp/412.o -o /tmp/413.o
/usr/local/bin/ghc --supported-languages
Reading installed packages...
/usr/local/bin/ghc-pkg list
Reading available packages...
Resolving dependencies...
At this point, the program starts to eat up virtual memory, locking up the system and eventually prompting the OS to warn me of dwindling disk space.
Here's my environment. I'm also on Mac OS X 10.4.11.
$ ghc --version
The Glorious Glasgow Haskell Compilation System, version 6.8.2
$ ghc-pkg list -V
GHC package manager version 6.8.2
$ cabal --version
cabal-install version 0.5.9
using version 1.5.3 of the Cabal library