WP 3.0 bug with pagination? (when using static page as homepage)

Hey,

Our users have reported trouble with our custom page templates when using a static homepage. The page template has a query_posts with pagination in it. Here is an example for our standard blog page template:

<?php
/*
Template Name: Blog
*/
?>
<?php get_header(); ?>
<?php global $woo_options; ?>

	<?php woo_crumbs(); ?>
	</div><!-- /#top -->

   <div id="content">
	<div class="col-full">  

        <!-- #main Starts -->
        <div id="main" class="col-left">      

		<?php
		$paged = (get_query_var('paged')) ? get_query_var('paged') : 1;
		$args=array(
		   'paged'=>$paged,
		   );
		query_posts($args);
		 ?>
        <?php if (have_posts()) : $count = 0; ?>
        <?php while (have_posts()) : the_post(); $count++; ?>

            <!-- Post Starts -->
            <div <?php post_class(); ?>>

                <h2 class="title"><a href="<?php the_permalink() ?>" rel="bookmark" title="<?php the_title(); ?>"><?php the_title(); ?></a></h2>

                <div class="entry">
					<?php global $more; $more = 0; ?>
					<?php the_content(); ?>
                </div>

            </div><!-- /.post -->

        <?php endwhile; else: ?>
            <div class="post">
                <p><?php _e('Sorry, no posts matched your criteria.', 'woothemes') ?></p>
            </div><!-- /.post -->
        <?php endif; ?>  

	        <div class="post-entries">
	            <div class="post-prev fl"><?php previous_post_link( '%link', '<span class="meta-nav">&laquo;</span> %title' ) ?></div>
	            <div class="post-next fr"><?php next_post_link( '%link', '%title <span class="meta-nav">&raquo;</span>' ) ?></div>
	            <div class="fix"></div>
	        </div>	

        </div><!-- /#main -->
        <?php woo_main_after(); ?>

        <?php get_sidebar(); ?>

	</div><!-- /#col-full -->
    </div><!-- /#content -->

<?php get_footer(); ?>

This worked fine in all our themes in WP 2.9.2, and works fine in WP 3.0 as a normal page:

Blog page 1: https://cl.ly/6716a2a1fd3e314deac5
Blog page 2: https://cl.ly/969377b06da3669e9b53

If you set it up as static page homepage:

https://cl.ly/ebffedf37b7a3c5d709b

It shows only the page title of that page:

https://cl.ly/8a3addadd9defe9dbce2

Exactly the same page template as static homepage in WP 2.9.2:

https://cl.ly/9eff8e3a1ec33a5b9f51

I couldn’t see any changes on the codex page for query_posts, so I’m thinking this might be a bug?

Copying the page template (template-blog.php) to home.php works fine as well.

Another note, it doesn’t matter which static homepage you select… It can be a normal page, it doesn’t have to be the page template in question. The page template stops working when you set a static homepage.