I can confirm that the above steps will produce a situation which causes Vanilla Minecraft to hang (running on Minecraft Linux):
[code][10:51:53 INFO]: Client> [10:51:53] [Server thread/INFO]: Starting integrated minecraft server version 1.7.4
[10:51:53 INFO]: Client> [10:51:53] [Server thread/INFO]: Generating keypair
[10:51:54 INFO]: Client> [10:51:54] [Server thread/INFO]: Converting map!
[10:51:54 INFO]: Client> [10:51:54] [Server thread/INFO]: Scanning folders...
[10:51:54 INFO]: Client> [10:51:54] [Server thread/INFO]: Total conversion count is 0
[10:51:54 INFO]: Client> [10:51:54] [Server thread/ERROR]: Encountered an unexpected exception
[10:51:54 INFO]: Client> s: Exception getting block type in world
[10:51:54 INFO]: Client> at afs.<init>(SourceFile:202) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at mm.<init>(SourceFile:69) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at btk.a(SourceFile:70) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at btk.e(SourceFile:99) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at net.minecraft.server.MinecraftServer.run(SourceFile:327) [1.7.4.jar:?]
[10:51:54 INFO]: Client> at lb.run(SourceFile:616) [1.7.4.jar:?]
[10:51:54 INFO]: Client> Caused by: java.lang.IllegalArgumentException: bound must be positive
[10:51:54 INFO]: Client> at java.util.Random.nextInt(Random.java:388) ~[?:1.8.0]
[10:51:54 INFO]: Client> at agr.a(SourceFile:122) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at agr.a(SourceFile:27) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at agl.a(SourceFile:364) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at ahg.a(SourceFile:74) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at apl.a(SourceFile:162) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at ml.a(SourceFile:160) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at aoo.a(SourceFile:778) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at ml.c(SourceFile:95) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at ml.d(SourceFile:108) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at afs.e(SourceFile:311) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at afs.a(SourceFile:249) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at afs.c(SourceFile:273) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at afs.b(SourceFile:234) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at apf.a(SourceFile:62) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at mm.b(SourceFile:565) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at mm.a(SourceFile:534) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at afs.<init>(SourceFile:193) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> ... 5 more
[10:51:54 INFO]: Client> [10:51:54] [Server thread/ERROR]: This crash report has been saved to: /home/seann/.minecraft/crash-reports/crash-2014-02-22_10.51.54-server.txt
[10:51:54 INFO]: Client> [10:51:54] [Server thread/INFO]: Stopping server
[10:51:54 INFO]: Client> [10:51:54] [Server thread/INFO]: Saving players
[10:51:54 INFO]: Client> [10:51:54] [Server thread/INFO]: Saving worlds
[10:51:54 INFO]: Client> [10:51:54] [Server thread/ERROR]: Exception stopping the server
[10:51:54 INFO]: Client> java.lang.NullPointerException
[10:51:54 INFO]: Client> at net.minecraft.server.MinecraftServer.n(SourceFile:299) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at btk.n(SourceFile:230) ~[1.7.4.jar:?]
[10:51:54 INFO]: Client> at net.minecraft.server.MinecraftServer.run(SourceFile:389) [1.7.4.jar:?]
[10:51:54 INFO]: Client> at lb.run(SourceFile:616) [1.7.4.jar:?]
Full log file attached.
From Linux. Demonstrates the issue with a Minecraft generated world map using the steps outlined in bug report MC-46082.