diff --git a/Cargo.lock b/Cargo.lock
index 57ab2c8..0867479 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -476,6 +476,7 @@ dependencies = [
  "dashmap 6.1.0",
  "mist-codegen",
  "mist-parser",
+ "pest",
  "ropey",
  "serde",
  "serde_json",
diff --git a/analyzer.bat b/analyzer.bat
index 8ffbbf8..446d793 100644
--- a/analyzer.bat
+++ b/analyzer.bat
@@ -4,6 +4,6 @@ cd D:\projects\mist\mist
 
 mist build >nul 2>&1
 
-cd D:\projects\mist\mist-lsp-test
+cd mist-test
 
 D:\projects\mist\mist\target\debug\mist-analyzer.exe
diff --git a/crates/analyzer/Cargo.toml b/crates/analyzer/Cargo.toml
index 28072c3..c8445e3 100644
--- a/crates/analyzer/Cargo.toml
+++ b/crates/analyzer/Cargo.toml
@@ -11,6 +11,7 @@ categories = ["compilers"]
 [dependencies]
 mist-parser = { workspace = true }
 mist-codegen = { workspace = true }
+pest = "2.8.6"
 
 dashmap = "6.1.0"
 tokio = { version = "1.52.3", features = ["full", "macros", "rt", "rt-multi-thread"] }
diff --git a/crates/analyzer/src/lib.rs b/crates/analyzer/src/lib.rs
index 65a74ec..45a5dd9 100644
--- a/crates/analyzer/src/lib.rs
+++ b/crates/analyzer/src/lib.rs
@@ -1,12 +1,14 @@
 pub mod rust_analyzer;
 pub mod transpiler;
 
-use std::collections::HashMap;
+use std::collections::{HashMap, HashSet};
 use std::path::{Component, Path, PathBuf};
 use std::sync::Arc;
 use std::sync::atomic::{AtomicU64, Ordering};
 
+use mist_parser::error::ParseError;
 use mist_parser::rev_mapper::{Mapping, MistMap, RustMap};
+use mist_parser::parse;
 use ropey::Rope;
 use serde::Deserialize;
 use serde_json::Value;
@@ -19,6 +21,43 @@ use crate::transpiler::transpile_mist;
 
 static MARKER_COUNTER: AtomicU64 = AtomicU64::new(0);
 
+const KEYWORDS: [&'static str; 25] = [
+    "if",
+    "else",
+    "for",
+    "while",
+    "match",
+    "return",
+    "break",
+    "continue",
+    "struct",
+    "enum",
+    "class",
+    "trait",
+    "impl",
+    "pub",
+    "mut",
+    "let",
+    "true",
+    "false",
+    "dyn",
+    "loop",
+    "fn",
+    "unsafe",
+    "override",
+    "module",
+    "void"
+];
+
+fn keyword_completion_items() -> impl Iterator<Item = CompletionItem> {
+    KEYWORDS.into_iter().map(|kw| CompletionItem {
+        label: kw.to_string(),
+        kind: Some(CompletionItemKind::KEYWORD),
+        insert_text: Some(kw.to_string()),
+        ..Default::default()
+    })
+}
+
 #[derive(Debug)]
 struct Backend {
     client: Client,
@@ -28,6 +67,7 @@ struct Backend {
     mapping: Arc<Mutex<HashMap<PathBuf, Mapping>>>,
     documents: Arc<Mutex<HashMap<PathBuf, Rope>>>,
     doc_versions: Arc<Mutex<HashMap<PathBuf, i32>>>,
+    last_rust_contents: Arc<Mutex<HashMap<PathBuf, String>>>,
     notification_rx: Arc<Mutex<Option<tokio::sync::mpsc::UnboundedReceiver<Value>>>>,
 }
 
@@ -80,6 +120,63 @@ fn byte_offset_from_lsp(source: &str, line: u32, character: u32) -> Option<usize
     }
 }
 
+/// Inject a marker at the exact cursor position. If the cursor is inside or
+/// at the start of an identifier-like token, the entire token is replaced with
+/// the marker so parsing doesn't break from a mid-token split.
+fn inject_marker_at(source: &str, line: u32, character: u32, marker: &str) -> Option<String> {
+    let offset = byte_offset_from_lsp(source, line, character)?;
+
+    let before = &source[..offset];
+    let after = &source[offset..];
+
+    // Identifier chars immediately before and after the cursor (as byte-counts).
+    let trail_bytes: usize = before
+        .chars()
+        .rev()
+        .take_while(|c| c.is_alphanumeric() || *c == '_')
+        .map(|c| c.len_utf8())
+        .sum();
+    let lead_bytes: usize = after
+        .chars()
+        .take_while(|c| c.is_alphanumeric() || *c == '_')
+        .map(|c| c.len_utf8())
+        .sum();
+
+    if trail_bytes > 0 || lead_bytes > 0 {
+        // Cursor touches an identifier — replace the whole token with the marker.
+        let token_start = offset - trail_bytes;
+        let token_end = offset + lead_bytes;
+
+        let mut s = String::with_capacity(source.len() + marker.len() + 4);
+        s.push_str(&source[..token_start]);
+        s.push_str(marker);
+        s.push_str(&source[token_end..]);
+        return Some(s);
+    }
+
+    // Not on an identifier.  If the cursor is on a `.` treat it as a field-access
+    // and inject the marker as an identifier right after the dot.
+    if after.starts_with('.') {
+        let dot_end = offset + '.'.
+            len_utf8();
+        let mut s = String::with_capacity(source.len() + marker.len() + 4);
+        s.push_str(&source[..dot_end]);
+        s.push_str(marker);
+        s.push_str(&source[dot_end..]);
+        return Some(s);
+    }
+
+    // Whitespace / other punctuation — inject as standalone expression.
+    let mut s = String::with_capacity(source.len() + marker.len() + 4);
+    s.push_str(&source[..offset]);
+    s.push(' ');
+    s.push_str(marker);
+    s.push(' ');
+    s.push_str(&source[offset..]);
+    Some(s)
+}
+
+
 fn find_marker_position(content: &str, marker: &str) -> Option<Position> {
     let idx = content.find(marker)?;
     let before = &content[..idx];
@@ -134,6 +231,102 @@ fn rust_uri_to_mist_uri(rust_uri: &Url) -> Option<Url> {
     clean_lsp_url(&mist_path)
 }
 
+fn byte_offset_to_lsp_pos(source: &str, offset: usize) -> Position {
+    let mut line = 0u32;
+    let mut col = 0u32;
+    for (i, ch) in source.char_indices() {
+        if i >= offset {
+            break;
+        }
+        if ch == '\n' {
+            line += 1;
+            col = 0;
+        } else {
+            col += 1;
+        }
+    }
+    Position {
+        line,
+        character: col,
+    }
+}
+
+/// Re-parse the source to extract a proper LSP diagnostic from the error.
+/// Returns None when the error is a semantic check failure (can be multiple
+/// errors) or when re-parsing unexpectedly succeeds.
+fn transpile_error_to_diagnostic(source: &str) -> Option<Diagnostic> {
+    match parse(source) {
+        Err(ParseError::PreAst(pest_err)) => {
+            let (line, col) = match pest_err.line_col {
+                pest::error::LineColLocation::Pos((l, c)) => (l, c),
+                pest::error::LineColLocation::Span((l, c), _) => (l, c),
+            };
+            let message = match &pest_err.variant {
+                pest::error::ErrorVariant::ParsingError {
+                    positives,
+                    negatives,
+                } => {
+                    let mut msg = String::new();
+                    if !positives.is_empty() {
+                        msg.push_str("expected ");
+                        for (i, r) in positives.iter().enumerate() {
+                            if i > 0 {
+                                msg.push_str(" or ");
+                            }
+                            msg.push_str(&format!("{r:?}"));
+                        }
+                    }
+                    if !negatives.is_empty() {
+                        if !msg.is_empty() {
+                            msg.push_str(", ");
+                        }
+                        msg.push_str("unexpected ");
+                        for (i, r) in negatives.iter().enumerate() {
+                            if i > 0 {
+                                msg.push_str(" or ");
+                            }
+                            msg.push_str(&format!("{r:?}"));
+                        }
+                    }
+                    if msg.is_empty() {
+                        msg.push_str("parse error");
+                    }
+                    msg
+                }
+                pest::error::ErrorVariant::CustomError { message } => message.clone(),
+            };
+            Some(Diagnostic {
+                range: Range {
+                    start: Position {
+                        line: line as u32 - 1,
+                        character: col as u32 - 1,
+                    },
+                    end: Position {
+                        line: line as u32 - 1,
+                        character: col as u32,
+                    },
+                },
+                severity: Some(DiagnosticSeverity::ERROR),
+                source: Some("mist".to_string()),
+                message,
+                ..Default::default()
+            })
+        }
+        Err(ParseError::Ast(ast_err)) => {
+            let start = byte_offset_to_lsp_pos(source, ast_err.span.start());
+            let end = byte_offset_to_lsp_pos(source, ast_err.span.end());
+            Some(Diagnostic {
+                range: Range { start, end },
+                severity: Some(DiagnosticSeverity::ERROR),
+                source: Some("mist".to_string()),
+                message: ast_err.error_message.clone(),
+                ..Default::default()
+            })
+        }
+        Ok(_) => None,
+    }
+}
+
 impl Backend {
     /// Resolve a Mist cursor position to a Rust position by injecting a unique marker
     /// into the source at the cursor, transpiling, and finding the marker in the output.
@@ -148,18 +341,111 @@ impl Backend {
         let id = MARKER_COUNTER.fetch_add(1, Ordering::Relaxed);
         let marker = format!("__mist_mk{id:x}__");
 
-        let offset = byte_offset_from_lsp(source, line, character)?;
+        let modified = match inject_marker_at(source, line, character, &marker) {
+            Some(m) => m,
+            None => {
+                eprintln!("[marker] inject_marker_at returned None for LSP({line},{character})");
+                return None;
+            }
+        };
 
-        let mut modified = String::with_capacity(source.len() + marker.len() + 4);
-        modified.push_str(&source[..offset]);
-        modified.push(' ');
-        modified.push_str(&marker);
-        modified.push(' ');
-        modified.push_str(&source[offset..]);
+        let transpiled = match transpile_mist(mist_path, &modified, extra_mod_decl) {
+            Ok(t) => t,
+            Err(e) => {
+                eprintln!("[marker] transpile failed for {marker} at LSP({line},{character}): {e}");
 
-        let transpiled = transpile_mist(mist_path, &modified, extra_mod_decl).ok()?;
-        let rust_pos = find_marker_position(&transpiled.rust_content, &marker)?;
-        let rust_uri = clean_lsp_url(&transpiled.rust_path)?;
+                // Fallback: the source has a syntax error that prevents transpilation.
+                // Use the last known working Rust content + mapping to inject the
+                // marker at the nearest valid Rust position.
+                let mist_target = MistMap(line as usize + 1, character as usize);
+                let mut rust_path = crate::from_mist_to_rust(mist_path.to_path_buf());
+                if mist_path.file_name().and_then(|n| n.to_str()) == Some("package.mist") {
+                    rust_path.set_file_name("mod.rs");
+                }
+
+                let (last_mapping, last_content) = {
+                    let map_guard = self.mapping.lock().await;
+                    let content_guard = self.last_rust_contents.lock().await;
+                    let m = map_guard.get(&rust_path)?.clone();
+                    let c = content_guard.get(mist_path)?.clone();
+                    (m, c)
+                };
+
+                let (_rust_before, mist_before) = last_mapping.find_by_mist(&mist_target)?;
+
+                // Find the next mapping entry after mist_before — the marker goes
+                // right before it in the Rust output, filling the gap.
+                let rust_next = last_mapping
+                    .map
+                    .iter()
+                    .filter(|(_, mist)| *mist > mist_before)
+                    .min_by_key(|(_, mist)| *mist)
+                    .map(|(rust, _)| *rust);
+
+                let (modified_rust, rust_pos) = if let Some(next_rust) = rust_next {
+                    let lsp_line = (next_rust.0 - 1) as u32;
+                    let lsp_col = next_rust.1 as u32;
+                    let modified = inject_marker_at(&last_content, lsp_line, lsp_col, &marker)?;
+                    let pos = find_marker_position(&modified, &marker)?;
+                    (modified, pos)
+                } else {
+                    let modified = format!("{last_content}\nlet _ = {};", marker);
+                    let pos = find_marker_position(&modified, &marker)?;
+                    (modified, pos)
+                };
+
+                let rust_uri = clean_lsp_url(&rust_path)?;
+
+                {
+                    let mut ra = self.rust_analyzer.lock().await;
+                    let mut versions = self.doc_versions.lock().await;
+                    let version = versions.entry(mist_path.to_path_buf()).or_insert(0);
+                    *version += 1;
+                    let _ = ra
+                        .did_change(rust_uri.clone(), &modified_rust, *version)
+                        .await;
+                }
+
+                eprintln!(
+                    "[marker] {marker} (fallback): mist LSP({line},{character}) -> rust LSP({},{})",
+                    rust_pos.line, rust_pos.character
+                );
+
+                return Some((rust_uri, rust_pos));
+            }
+        };
+        let rust_pos = match find_marker_position(&transpiled.rust_content, &marker) {
+            Some(p) => p,
+            None => {
+                eprintln!("[marker] marker {marker} not found in transpiled output");
+                return None;
+            }
+        };
+        let rust_uri = match clean_lsp_url(&transpiled.rust_path) {
+            Some(u) => u,
+            None => {
+                eprintln!("[marker] failed to create URI for {:?}", transpiled.rust_path);
+                return None;
+            }
+        };
+
+        eprintln!(
+            "[marker] {marker}: mist LSP({line},{character}) -> rust LSP({},{})",
+            rust_pos.line, rust_pos.character
+        );
+
+        // If actual source can't be transpiled, rust-analyzer's file is stale.
+        // Push the markered transpiled content so the upcoming LSP request (completion,
+        // hover, goto_def) sees the right context (the marker acts as placeholder).
+        if transpile_mist(mist_path, source, extra_mod_decl).is_err() {
+            let mut ra = self.rust_analyzer.lock().await;
+            let mut versions = self.doc_versions.lock().await;
+            let version = versions.entry(mist_path.to_path_buf()).or_insert(0);
+            *version += 1;
+            let _ = ra
+                .did_change(rust_uri.clone(), &transpiled.rust_content, *version)
+                .await;
+        }
 
         Some((rust_uri, rust_pos))
     }
@@ -202,22 +488,24 @@ impl Backend {
             Ok(t) => t,
             Err(e) => {
                 eprintln!("transpile error for {:?}: {e}", mist_path);
-                let diag = Diagnostic {
-                    range: Range {
-                        start: Position {
-                            line: 0,
-                            character: 0,
+                let diag = transpile_error_to_diagnostic(source).unwrap_or_else(|| {
+                    Diagnostic {
+                        range: Range {
+                            start: Position {
+                                line: 0,
+                                character: 0,
+                            },
+                            end: Position {
+                                line: 0,
+                                character: 1,
+                            },
                         },
-                        end: Position {
-                            line: 0,
-                            character: 1,
-                        },
-                    },
-                    severity: Some(DiagnosticSeverity::ERROR),
-                    source: Some("mist".to_string()),
-                    message: format!("Transpile error: {e}"),
-                    ..Default::default()
-                };
+                        severity: Some(DiagnosticSeverity::ERROR),
+                        source: Some("mist".to_string()),
+                        message: format!("Transpile error: {e}"),
+                        ..Default::default()
+                    }
+                });
                 if let Some(uri) = clean_lsp_url(mist_path) {
                     self.publish_diagnostics(uri, vec![diag]).await;
                 }
@@ -243,6 +531,15 @@ impl Backend {
             }
 
             map.insert(transpiled.rust_path, transpiled.mapping);
+            self.last_rust_contents
+                .lock()
+                .await
+                .insert(mist_path.to_path_buf(), transpiled.rust_content);
+        }
+
+        // Clear any previous diagnostics — transpile succeeded.
+        if let Some(mist_uri) = clean_lsp_url(mist_path) {
+            self.publish_diagnostics(mist_uri, vec![]).await;
         }
     }
 
@@ -254,6 +551,8 @@ impl Backend {
         let src_root = ws.join("src");
         let package_mist = read_mist_package(&ws);
 
+        self.ensure_implicit_packages(&src_root).await;
+
         // Collect sources first to avoid holding locks during transpile
         let sources: Vec<(PathBuf, String, String)> = {
             let docs = self.documents.lock().await;
@@ -274,6 +573,13 @@ impl Backend {
         }
     }
 
+    /// Create synthetic `package.mist` documents for subdirectories that contain
+    /// .mist files but no real package.mist (implicit packages).
+    async fn ensure_implicit_packages(&self, src_root: &Path) {
+        let mut docs = self.documents.lock().await;
+        ensure_implicit_packages_impl(&mut *docs, src_root);
+    }
+
     async fn publish_diagnostics(&self, uri: Url, diagnostics: Vec<Diagnostic>) {
         let key = uri.clone();
         let prev = self.previous_diagnostics.lock().await.get(&key).cloned();
@@ -342,6 +648,7 @@ impl LanguageServer for Backend {
         let ra = self.rust_analyzer.clone();
         let mapping = self.mapping.clone();
         let documents = self.documents.clone();
+        let last_rust_contents = self.last_rust_contents.clone();
         let client = self.client.clone();
         let previous_diagnostics = self.previous_diagnostics.clone();
         let notification_rx = self.notification_rx.clone();
@@ -350,14 +657,19 @@ impl LanguageServer for Backend {
             if let Some(root) = &*ws.lock().await {
                 let src_root = root.join("src");
 
-                if let Err(e) = ra.lock().await.initialize(root).await {
-                    eprintln!("Failed to initialize rust-analyzer: {e}");
-                    return;
-                }
-
-                if let Err(e) = ra.lock().await.initialized().await {
-                    eprintln!("rust-analyzer initialized failed: {e}");
-                    return;
+                // Hold the lock across both initialize + initialized so the
+                // editor's didOpen cannot race in-between and send notifications
+                // to rust-analyzer before it has received Initialized.
+                {
+                    let mut guard = ra.lock().await;
+                    if let Err(e) = guard.initialize(root).await {
+                        eprintln!("Failed to initialize rust-analyzer: {e}");
+                        return;
+                    }
+                    if let Err(e) = guard.initialized().await {
+                        eprintln!("rust-analyzer initialized failed: {e}");
+                        return;
+                    }
                 }
 
                 let mut files = Vec::new();
@@ -374,6 +686,8 @@ impl LanguageServer for Backend {
 
                 eprintln!("Loaded {} mist files", files.len());
 
+                ensure_implicit_packages_impl(&mut *documents.lock().await, &src_root);
+
                 // Compute mod_decls before any transpile so the root file gets its
                 // child module declarations from the very first didOpen.
                 let package_mist = read_mist_package(root);
@@ -410,6 +724,49 @@ impl LanguageServer for Backend {
                             .lock()
                             .await
                             .insert(transpiled.rust_path, transpiled.mapping);
+                        last_rust_contents
+                            .lock()
+                            .await
+                            .insert(file.clone(), transpiled.rust_content);
+                    }
+                }
+
+                // Also transpile synthetic package.mist files (implicit packages)
+                // so rust-analyzer has their content from the start.
+                let synthetic_paths: Vec<PathBuf> = documents
+                    .lock()
+                    .await
+                    .keys()
+                    .filter(|p| {
+                        !files.contains(p)
+                            && p.file_name().and_then(|n| n.to_str()) == Some("package.mist")
+                    })
+                    .cloned()
+                    .collect();
+                for syn_path in &synthetic_paths {
+                    let decl = mod_decls.get(syn_path).map(String::as_str).unwrap_or("");
+                    let source = documents
+                        .lock()
+                        .await
+                        .get(syn_path)
+                        .map(|r| r.to_string())
+                        .unwrap_or_default();
+                    if let Ok(transpiled) = transpile_mist(syn_path, &source, decl) {
+                        if let Some(rust_uri) = clean_lsp_url(&transpiled.rust_path) {
+                            let _ = ra
+                                .lock()
+                                .await
+                                .did_open(rust_uri, &transpiled.rust_content)
+                                .await;
+                            mapping
+                                .lock()
+                                .await
+                                .insert(transpiled.rust_path, transpiled.mapping);
+                            last_rust_contents
+                                .lock()
+                                .await
+                                .insert(syn_path.clone(), transpiled.rust_content);
+                        }
                     }
                 }
 
@@ -552,6 +909,7 @@ impl LanguageServer for Backend {
             )
             .await
         else {
+            eprintln!("[completion] resolve_mist_via_marker returned None at ({}, {})", mist_pos.line, mist_pos.character);
             return Ok(None);
         };
 
@@ -577,17 +935,35 @@ impl LanguageServer for Backend {
             .await
         {
             Ok(Some(CompletionResponse::Array(items))) => {
-                let cleaned: Vec<CompletionItem> =
+                let mut cleaned: Vec<CompletionItem> =
                     items.into_iter().map(clean_completion_item).collect();
+
+                let existing: HashSet<String> =
+                    cleaned.iter().map(|item| item.label.clone()).collect();
+
+                cleaned.extend(
+                    keyword_completion_items()
+                        .filter(|item| !existing.contains(&item.label)),
+                );
+
                 Ok(Some(CompletionResponse::Array(cleaned)))
             }
-            Ok(Some(CompletionResponse::List(list))) => {
-                let cleaned: Vec<CompletionItem> =
+
+            Ok(Some(CompletionResponse::List(mut list))) => {
+                let mut cleaned: Vec<CompletionItem> =
                     list.items.into_iter().map(clean_completion_item).collect();
-                Ok(Some(CompletionResponse::List(CompletionList {
-                    is_incomplete: list.is_incomplete,
-                    items: cleaned,
-                })))
+
+                let existing: HashSet<String> =
+                    cleaned.iter().map(|item| item.label.clone()).collect();
+
+                cleaned.extend(
+                    keyword_completion_items()
+                        .filter(|item| !existing.contains(&item.label)),
+                );
+
+                list.items = cleaned;
+
+                Ok(Some(CompletionResponse::List(list)))
             }
             Ok(None) => Ok(None),
             Err(e) => {
@@ -603,6 +979,10 @@ impl LanguageServer for Backend {
     ) -> tower_lsp::jsonrpc::Result<Option<GotoDefinitionResponse>> {
         let mist_uri = params.text_document_position_params.text_document.uri;
         let mist_pos = params.text_document_position_params.position;
+        eprintln!(
+            "[goto_definition] entered at mist ({}, {})",
+            mist_pos.line, mist_pos.character
+        );
 
         let mist_path = match mist_uri.to_file_path() {
             Ok(p) => p,
@@ -624,12 +1004,13 @@ impl LanguageServer for Backend {
             )
             .await
         else {
+            eprintln!("[goto_definition] resolve_mist_via_marker returned None at ({}, {})", mist_pos.line, mist_pos.character);
             return Ok(None);
         };
 
         let gd_params = GotoDefinitionParams {
             text_document_position_params: TextDocumentPositionParams {
-                text_document: TextDocumentIdentifier { uri: rust_uri },
+                text_document: TextDocumentIdentifier { uri: rust_uri.clone() },
                 position: rust_pos,
             },
             work_done_progress_params: WorkDoneProgressParams {
@@ -639,6 +1020,10 @@ impl LanguageServer for Backend {
                 partial_result_token: None,
             },
         };
+        eprintln!(
+            "[goto_definition] rust-analyzer request at {} ({},{})",
+            rust_uri, rust_pos.line, rust_pos.character
+        );
 
         match self
             .rust_analyzer
@@ -648,8 +1033,8 @@ impl LanguageServer for Backend {
             .await
         {
             Ok(Some(GotoDefinitionResponse::Scalar(loc))) => {
-                let mapped = self.map_rust_to_mist_pos(&loc.uri, &loc.range.start).await;
-                match mapped {
+                eprintln!("[goto_definition] Scalar response");
+                match self.map_rust_to_mist_pos(&loc.uri, &loc.range.start).await {
                     Some((mist_uri, mist_start)) => {
                         let mist_range = Range {
                             start: mist_start,
@@ -663,10 +1048,21 @@ impl LanguageServer for Backend {
                             range: mist_range,
                         })))
                     }
-                    None => Ok(Some(GotoDefinitionResponse::Scalar(loc))),
+                    None => {
+                        if let Some(normalized) = loc.uri.to_file_path().ok().and_then(|p| clean_lsp_url(&p)) {
+                            eprintln!("[goto_definition] returning raw rust loc");
+                            Ok(Some(GotoDefinitionResponse::Scalar(Location {
+                                uri: normalized,
+                                range: loc.range,
+                            })))
+                        } else {
+                            Ok(Some(GotoDefinitionResponse::Scalar(loc)))
+                        }
+                    }
                 }
             }
             Ok(Some(GotoDefinitionResponse::Array(locs))) => {
+                eprintln!("[goto_definition] Array response with {} items", locs.len());
                 let mut mapped = Vec::new();
                 for loc in locs {
                     if let Some((mist_uri, mist_start)) =
@@ -682,11 +1078,17 @@ impl LanguageServer for Backend {
                                 },
                             },
                         });
+                    } else if let Some(normalized) = loc.uri.to_file_path().ok().and_then(|p| clean_lsp_url(&p)) {
+                        mapped.push(Location {
+                            uri: normalized,
+                            range: loc.range,
+                        });
                     }
                 }
                 Ok(Some(GotoDefinitionResponse::Array(mapped)))
             }
             Ok(Some(GotoDefinitionResponse::Link(links))) => {
+                eprintln!("[goto_definition] Link response with {} items", links.len());
                 let mut mapped = Vec::new();
                 for link in links {
                     if let Some((mist_uri, mist_start)) = self
@@ -711,11 +1113,23 @@ impl LanguageServer for Backend {
                                 },
                             },
                         });
+                    } else if let Some(normalized) =
+                        link.target_uri.to_file_path().ok().and_then(|p| clean_lsp_url(&p))
+                    {
+                        mapped.push(LocationLink {
+                            origin_selection_range: link.origin_selection_range,
+                            target_uri: normalized,
+                            target_range: link.target_range,
+                            target_selection_range: link.target_selection_range,
+                        });
                     }
                 }
                 Ok(Some(GotoDefinitionResponse::Link(mapped)))
             }
-            Ok(None) => Ok(None),
+            Ok(None) => {
+                eprintln!("[goto_definition] rust-analyzer returned None");
+                Ok(None)
+            }
             Err(e) => {
                 eprintln!("goto_definition error: {e}");
                 Ok(None)
@@ -747,6 +1161,7 @@ impl LanguageServer for Backend {
             )
             .await
         else {
+            eprintln!("[hover] resolve_mist_via_marker returned None at ({}, {})", mist_pos.line, mist_pos.character);
             return Ok(None);
         };
 
@@ -893,6 +1308,7 @@ pub async fn start() {
             mapping: Arc::new(Mutex::new(HashMap::new())),
             documents: Arc::new(Mutex::new(HashMap::new())),
             doc_versions: Arc::new(Mutex::new(HashMap::new())),
+            last_rust_contents: Arc::new(Mutex::new(HashMap::new())),
             rust_analyzer: Arc::new(Mutex::new(
                 RustAnalyzer::new(tx).expect("Failed to create rust analyzer"),
             )),
@@ -962,10 +1378,15 @@ fn compute_mod_decls(
                 Some(s) => s,
                 None => continue,
             };
-            // Skip the root package file itself
+            // Skip the root package entry file (e.g. main.mist)
             if *file == package_path {
                 continue;
             }
+            // Skip any subdirectory package.mist — it's the directory's own
+            // entry file, not a sibling submodule.
+            if stem == "package" {
+                continue;
+            }
             mod_decl.push_str(&format!("pub mod {};\n", stem));
         }
 
@@ -981,9 +1402,68 @@ fn compute_mod_decls(
         }
     }
 
+    // For each subdirectory that is a Mist module, add pub mod <dirname>;
+    // to the parent directory's declarations so the parent's transpiled Rust
+    // output includes the child module declaration.
+    for dir in dirs.keys() {
+        if dir == src_root {
+            continue;
+        }
+        let dirname = match dir.file_name().and_then(|n| n.to_str()) {
+            Some(n) => n,
+            None => continue,
+        };
+        let parent = dir.parent().unwrap();
+        let parent_target = if parent == src_root {
+            package_path.clone()
+        } else {
+            let pkg = parent.join("package.mist");
+            if !documents.contains_key(&pkg) {
+                continue;
+            }
+            pkg
+        };
+        result
+            .entry(parent_target)
+            .or_default()
+            .push_str(&format!("pub mod {};\n", dirname));
+    }
+
     result
 }
 
+fn ensure_implicit_packages_impl(
+    docs: &mut HashMap<PathBuf, Rope>,
+    src_root: &Path,
+) {
+    let mut dirs_with_mist: HashMap<PathBuf, Vec<PathBuf>> = HashMap::new();
+    for mist_path in docs.keys() {
+        if let Ok(rel) = mist_path.strip_prefix(src_root) {
+            if let Some(parent) = rel.parent() {
+                if !parent.as_os_str().is_empty() {
+                    dirs_with_mist
+                        .entry(src_root.join(parent))
+                        .or_default()
+                        .push(mist_path.clone());
+                }
+            }
+        }
+    }
+
+    for dir in dirs_with_mist.keys() {
+        let pkg_path = dir.join("package.mist");
+        if !docs.contains_key(&pkg_path) {
+            let dirname = dir
+                .file_name()
+                .and_then(|n| n.to_str())
+                .unwrap_or("module")
+                .to_string();
+            let content = format!("pub module {dirname};\n");
+            docs.insert(pkg_path, Rope::from_str(&content));
+        }
+    }
+}
+
 fn clean_completion_item(mut item: CompletionItem) -> CompletionItem {
     item.text_edit = None;
     item.additional_text_edits = None;
diff --git a/crates/analyzer/src/rust_analyzer.rs b/crates/analyzer/src/rust_analyzer.rs
index 2fbee2f..b75d717 100644
--- a/crates/analyzer/src/rust_analyzer.rs
+++ b/crates/analyzer/src/rust_analyzer.rs
@@ -57,11 +57,16 @@ async fn read_lsp_message<R: AsyncBufReadExt + Unpin>(
 ) -> Result<String, Box<dyn std::error::Error + Send + Sync>> {
     let mut line = String::new();
     let mut content_length = 0;
+    let mut eof = false;
 
     for _ in 0..100 {
         line.clear();
         let bytes_read = reader.read_line(&mut line).await?;
-        if bytes_read == 0 || line.trim().is_empty() {
+        if bytes_read == 0 {
+            eof = true;
+            break;
+        }
+        if line.trim().is_empty() {
             break;
         }
         if line.to_ascii_lowercase().starts_with("content-length:") {
@@ -75,6 +80,9 @@ async fn read_lsp_message<R: AsyncBufReadExt + Unpin>(
     }
 
     if content_length == 0 {
+        if eof {
+            return Err("LSP stream closed (EOF)".into());
+        }
         return Err("Missing, invalid, or zero Content-Length header".into());
     }
     if content_length > MAX_CONTENT_LENGTH {
@@ -98,7 +106,7 @@ impl RustAnalyzer {
         let mut child = tokio::process::Command::new("rust-analyzer")
             .stdin(Stdio::piped())
             .stdout(Stdio::piped())
-            .stderr(Stdio::null())
+            .stderr(Stdio::piped())
             .spawn()?;
 
         let stdin = child
@@ -109,12 +117,35 @@ impl RustAnalyzer {
             .stdout
             .take()
             .ok_or("Failed to open child stdout pipe")?;
+        let stderr = child
+            .stderr
+            .take()
+            .ok_or("Failed to open child stderr pipe")?;
+
+        tokio::spawn(async move {
+            let mut stderr = stderr;
+            let mut buf = vec![0u8; 4096];
+            loop {
+                match stderr.read(&mut buf).await {
+                    Ok(0) => break,
+                    Ok(n) => {
+                        eprintln!("[ra-stderr] {}", String::from_utf8_lossy(&buf[..n]).trim_end());
+                    }
+                    Err(e) => {
+                        eprintln!("[ra-stderr] read error: {e}");
+                        break;
+                    }
+                }
+            }
+            eprintln!("[ra-stderr] stream closed");
+        });
 
         let pending: PendingMap = Arc::new(Mutex::new(HashMap::new()));
         let pending_clone = pending.clone();
 
         tokio::spawn(async move {
             let mut stdout = BufReader::new(stdout);
+            eprintln!("[ra-reader] started");
 
             loop {
                 let raw = match read_lsp_message(&mut stdout).await {
@@ -126,8 +157,12 @@ impl RustAnalyzer {
                         for (_, tx) in lock.drain() {
                             let _ = tx.send(Err(format!("LSP reader error: {}", err)));
                         }
-                        // Brief backoff then retry — ra may have sent a malformed frame
-                        // but the connection is still alive.
+                        // EOF means the child process exited — stop the reader.
+                        // Other errors (malformed frames) get a brief backoff then retry.
+                        if err.to_string().contains("LSP stream closed (EOF)") {
+                            eprintln!("LSP reader task: EOF detected, stopping reader");
+                            break;
+                        }
                         tokio::time::sleep(Duration::from_millis(50)).await;
                         continue;
                     }
diff --git a/crates/analyzer/src/transpiler.rs b/crates/analyzer/src/transpiler.rs
index 763674c..581ae12 100644
--- a/crates/analyzer/src/transpiler.rs
+++ b/crates/analyzer/src/transpiler.rs
@@ -1,8 +1,8 @@
 use std::path::{Path, PathBuf};
 
-use mist_codegen::{GetRust, RustCodegen};
+use mist_codegen::RustCodegen;
 use mist_parser::rev_mapper::Mapping;
-use mist_parser::{parse, parse_module};
+use mist_parser::parse;
 
 pub struct TranspiledFile {
     pub mist_path: PathBuf,
@@ -16,8 +16,13 @@ pub fn transpile_mist(
     source: &str,
     extra_mod_decl: &str,
 ) -> Result<TranspiledFile, String> {
-    let module_decl = parse_module(source).map_err(|e| format!("parse module error: {e:?}"))?;
-    let rust_path = crate::from_mist_to_rust(mist_path.to_path_buf());
+    let mut rust_path = crate::from_mist_to_rust(mist_path.to_path_buf());
+    // Package files (package.mist) must output as <dir>/mod.rs so the Rust module
+    // hierarchy resolves correctly (pub mod <child>; declarations look for sibling
+    // .rs files, and the parent module declaration looks for <dir>/mod.rs).
+    if mist_path.file_name().and_then(|n| n.to_str()) == Some("package.mist") {
+        rust_path.set_file_name("mod.rs");
+    }
 
     let parsed = parse(source).map_err(|e| format!("parse error: {e:?}"))?;
 
@@ -29,19 +34,12 @@ pub fn transpile_mist(
     let mut codegen = RustCodegen::new(mist_path.to_path_buf());
     let output = codegen.generate(parsed);
 
-    let self_mod_prefix = module_decl
-        .as_ref()
-        .map(|(vis, name)| format!("{}mod {};\n", vis.get_rust(), name.get_rust()))
-        .unwrap_or_default();
-
-    let combined_prefix = format!("{}{}", extra_mod_decl, self_mod_prefix);
-
-    codegen.mapping.shift_rust(combined_prefix.lines().count() as isize, 0);
+    codegen.mapping.shift_rust(extra_mod_decl.lines().count() as isize, 0);
 
     Ok(TranspiledFile {
         mist_path: mist_path.to_path_buf(),
         rust_path,
-        rust_content: format!("{}{}", combined_prefix, output),
+        rust_content: format!("{}{}", extra_mod_decl, output),
         mapping: codegen.mapping,
     })
 }