--- a/src/share/vm/memory/collectorPolicy.cpp	Mon Sep 13 16:45:00 2010 -0700
+++ b/src/share/vm/memory/collectorPolicy.cpp	Tue Sep 14 17:19:35 2010 -0700
@@ -32,7 +32,11 @@ void CollectorPolicy::initialize_flags()
     MaxPermSize = PermSize;
   }
   PermSize = MAX2(min_alignment(), align_size_down_(PermSize, min_alignment()));
-  MaxPermSize = align_size_up(MaxPermSize, max_alignment());
+  // Don't increase Perm size limit above specified.
+  MaxPermSize = align_size_down(MaxPermSize, max_alignment());
+  if (PermSize > MaxPermSize) {
+    PermSize = MaxPermSize;
+  }
 
   MinPermHeapExpansion = MAX2(min_alignment(), align_size_down_(MinPermHeapExpansion, min_alignment()));
   MaxPermHeapExpansion = MAX2(min_alignment(), align_size_down_(MaxPermHeapExpansion, min_alignment()));

--- a/src/share/vm/runtime/arguments.cpp	Mon Sep 13 16:45:00 2010 -0700
+++ b/src/share/vm/runtime/arguments.cpp	Tue Sep 14 17:19:35 2010 -0700
@@ -1250,7 +1250,8 @@ bool verify_object_alignment() {
 }
 
 inline uintx max_heap_for_compressed_oops() {
-  LP64_ONLY(return OopEncodingHeapMax - MaxPermSize - os::vm_page_size());
+  // Heap should be above HeapBaseMinAddress to get zero based compressed oops.
+  LP64_ONLY(return OopEncodingHeapMax - MaxPermSize - os::vm_page_size() - HeapBaseMinAddress);
   NOT_LP64(ShouldNotReachHere(); return 0);
 }