diff --git a/oracle-server.js b/oracle-server.js
new file mode 100644
index 0000000..35ce685
--- /dev/null
+++ b/oracle-server.js
@@ -0,0 +1,78 @@
+#!/usr/bin/env node
+/**
+ * Persistent Oracle Server for Go fuzz testing framework.
+ *
+ * Unlike cross-validate.ts which handles a single request and exits,
+ * this server stays alive and handles multiple requests via line-delimited JSON.
+ *
+ * Protocol:
+ * - Each line of stdin is a JSON request: {"oldTree": ..., "diff": ...}
+ * - Each request gets a JSON response on stdout: {"html": ..., "tree": ..., "error": ...}
+ * - Server exits when stdin closes
+ *
+ * This reduces per-request overhead from ~300ms (process spawn) to ~20-50ms (IPC only).
+ */
+
+const readline = require("readline");
+const { TreeRenderer } = require("./dist/state/tree-renderer");
+const { createLogger } = require("./dist/utils/logger");
+
+// Create a silent logger to avoid console output
+const logger = createLogger({ level: "error" });
+
+// Create readline interface for line-by-line processing
+const rl = readline.createInterface({
+  input: process.stdin,
+  output: process.stdout,
+  terminal: false,
+});
+
+// Process each line as a separate request
+rl.on("line", (line) => {
+  try {
+    const data = JSON.parse(line);
+
+    // Create a fresh renderer for each request to avoid state leakage
+    const renderer = new TreeRenderer(logger);
+
+    // Apply the old tree first (initial state)
+    if (data.oldTree) {
+      renderer.applyUpdate(data.oldTree);
+    }
+
+    // Apply the diff
+    const result = renderer.applyUpdate(data.diff);
+
+    // Get the current tree state from renderer
+    const finalTree = renderer.getTreeState();
+
+    const output = {
+      html: result.html,
+      tree: finalTree,
+      error: null,
+    };
+
+    // Write response as single line
+    console.log(JSON.stringify(output));
+  } catch (err) {
+    const output = {
+      html: "",
+      tree: null,
+      error: err instanceof Error ? err.message : String(err),
+    };
+    console.log(JSON.stringify(output));
+  }
+});
+
+// Handle stdin close
+rl.on("close", () => {
+  process.exit(0);
+});
+
+// Handle errors gracefully - use stdout to maintain JSON protocol
+// Exit after uncaught exception as process state may be corrupted
+process.on("uncaughtException", (err) => {
+  console.log(JSON.stringify({ html: "", tree: null, error: err.message }));
+  rl.close();
+  process.exit(1);
+});
diff --git a/state/tree-renderer.ts b/state/tree-renderer.ts
index 9ccf706..7dc7274 100644
--- a/state/tree-renderer.ts
+++ b/state/tree-renderer.ts
@@ -40,6 +40,81 @@ function isRangeNode(node: any): boolean {
   );
 }
 
+/**
+ * Checks if a node or any of its nested children contains a range structure.
+ *
+ * This is needed for detecting structure transitions like:
+ * - {{if .ShowList}}<ul>{{range .Items}}...{{end}}</ul>{{else}}<p>Hidden</p>{{end}}
+ *
+ * When ShowList changes from true to false, the outer node doesn't have `d` directly,
+ * but its child at position "0" does. We need to detect this nested range to know
+ * that a full replacement is required instead of a merge.
+ *
+ * @param node - The tree node to check
+ * @returns true if this node or any nested child has a range structure
+ */
+function hasRangeAnywhere(node: any, depth = 0): boolean {
+  // Depth limit to prevent potential stack overflow on deeply nested or malformed trees
+  const MAX_DEPTH = 50;
+  if (depth > MAX_DEPTH || node == null || typeof node !== "object" || Array.isArray(node)) {
+    return false;
+  }
+
+  // Check if this node itself is a range
+  if (isRangeNode(node)) {
+    return true;
+  }
+
+  // Check numeric keys (dynamic positions) for nested ranges
+  for (const key of Object.keys(node)) {
+    if (/^\d+$/.test(key)) {
+      const child = node[key];
+      if (child != null && typeof child === "object" && !Array.isArray(child)) {
+        if (hasRangeAnywhere(child, depth + 1)) {
+          return true;
+        }
+      }
+    }
+  }
+
+  return false;
+}
+
+/**
+ * Determines if a structure transition requires full replacement instead of merge.
+ *
+ * This handles cases where:
+ * 1. Old structure has a range (directly or nested) but new structure doesn't
+ * 2. New structure has statics (indicating a complete structure definition)
+ * 3. Old structure has dynamics that new structure doesn't have
+ *
+ * @param existing - The existing tree node
+ * @param update - The update tree node
+ * @returns true if the update should fully replace existing instead of merging
+ */
+function shouldFullReplace(existing: any, update: any): boolean {
+  // If update doesn't have statics, it's a partial update, not a replacement
+  if (!update.s || !Array.isArray(update.s)) {
+    return false;
+  }
+
+  // Check for range→non-range transition (including nested ranges)
+  if (hasRangeAnywhere(existing) && !hasRangeAnywhere(update)) {
+    return true;
+  }
+
+  // Check if existing has dynamics that update doesn't have
+  for (const key of Object.keys(existing)) {
+    if (/^\d+$/.test(key) && !(key in update)) {
+      // Existing has a dynamic position that update doesn't
+      // If update has statics, this is a structure change
+      return true;
+    }
+  }
+
+  return false;
+}
+
 /**
  * Handles tree state management and HTML reconstruction logic for LiveTemplate.
  */
@@ -132,14 +207,17 @@ export class TreeRenderer {
       return update;
     }
 
-    // Detect range→non-range transition: when existing has a range structure
-    // but update does NOT, we must do a full replacement instead of merge.
-    // Otherwise, the old range items would be preserved and rendered with
-    // the new (else clause) statics, causing wrong content.
-    // See isRangeNode() for definition of "range" vs "non-range" structures.
-    if (isRangeNode(existing) && !isRangeNode(update)) {
+    // Detect structure transitions that require full replacement instead of merge.
+    // This handles:
+    // 1. Direct range→non-range: existing has d/s arrays, update doesn't
+    // 2. Nested range→non-range: existing has range in a child, update doesn't
+    // 3. Structure changes: existing has dynamics that update doesn't have
+    //
+    // Without this check, old range data would be preserved and mixed with
+    // new statics, causing wrong content or memory leaks.
+    if (shouldFullReplace(existing, update)) {
       this.logger.debug(
-        `[deepMerge] Range→non-range transition at path ${currentPath}, replacing instead of merging`
+        `[deepMerge] Structure transition at path ${currentPath}, replacing instead of merging`
       );
       return update;
     }
@@ -274,10 +352,11 @@ export class TreeRenderer {
           );
           const changes = operation[2];
           if (updateIndex >= 0 && changes) {
-            currentItems[updateIndex] = {
-              ...currentItems[updateIndex],
-              ...changes,
-            };
+            currentItems[updateIndex] = this.mergeRangeItem(
+              currentItems[updateIndex],
+              changes,
+              statePath
+            );
           }
           break;
         }
@@ -592,10 +671,11 @@ export class TreeRenderer {
           );
           const changes = operation[2];
           if (updateIndex >= 0 && changes) {
-            currentItems[updateIndex] = {
-              ...currentItems[updateIndex],
-              ...changes,
-            };
+            currentItems[updateIndex] = this.mergeRangeItem(
+              currentItems[updateIndex],
+              changes,
+              statePath || ""
+            );
           }
           break;
         }
@@ -815,4 +895,14 @@ export class TreeRenderer {
       (item: any) => this.getItemKey(item, statics, statePath) === key
     );
   }
+
+  /**
+   * Merges changes into a range item using deep merge to preserve statics.
+   * When the server sends partial updates like {"5": {"0": "new text"}},
+   * we need to merge this into the existing item's field 5, not replace it.
+   * Shallow spread would lose the statics ({"s": [...]}) that the client has cached.
+   */
+  private mergeRangeItem(item: any, changes: any, statePath: string): any {
+    return this.deepMergeTreeNodes(item, changes, `${statePath}.item`);
+  }
 }
diff --git a/tests/tree-renderer.test.ts b/tests/tree-renderer.test.ts
index 9fc8235..8df62fd 100644
--- a/tests/tree-renderer.test.ts
+++ b/tests/tree-renderer.test.ts
@@ -184,4 +184,149 @@ describe("TreeRenderer", () => {
       expect(elseResult.html).toContain("<p>No items available</p>");
     });
   });
+
+  describe("render - NESTED range to non-range transition", () => {
+    /**
+     * This tests the case where a range is nested inside another structure:
+     *
+     * Template:
+     *   {{if .ShowList}}
+     *     <ul>
+     *     {{range .Items}}
+     *       <li id="{{.ID}}">{{.Text}}</li>
+     *     {{end}}
+     *     </ul>
+     *   {{else}}
+     *     <p>List is hidden</p>
+     *   {{end}}
+     *
+     * When ShowList goes from true to false:
+     * - Position 0 changes from {0: {range...}, s: ["<ul>", "</ul>"]}
+     * - To {s: ["<p>List is hidden</p>"]}
+     *
+     * The nested range at position 0.0 must be removed, not preserved.
+     */
+    it("should replace nested range structure with else clause", () => {
+      // Initial state: ShowList=true with items
+      // Structure: position 0 contains a UL wrapper with nested range at 0.0
+      const initialUpdate = {
+        s: ["<div>", "</div>"],
+        0: {
+          // The if-branch: UL wrapper containing the range
+          0: {
+            // The range (nested at position 0.0)
+            d: [
+              { 0: "item-1", 1: "Apple", _k: "item-1" },
+              { 0: "item-2", 1: "Banana", _k: "item-2" },
+            ],
+            s: ['<li id="', '">', "</li>"],
+          },
+          s: ["<ul>", "</ul>"], // UL wrapper statics
+        },
+      };
+      const initialResult = renderer.applyUpdate(initialUpdate);
+
+      expect(initialResult.html).toContain("<ul>");
+      expect(initialResult.html).toContain('<li id="item-1">Apple</li>');
+      expect(initialResult.html).toContain('<li id="item-2">Banana</li>');
+      expect(initialResult.html).toContain("</ul>");
+
+      // Update: ShowList=false, show else clause
+      // The nested range should be completely replaced
+      const elseUpdate = {
+        0: {
+          // The else-branch: just a paragraph
+          s: ["<p>List is hidden</p>"],
+        },
+      };
+      const elseResult = renderer.applyUpdate(elseUpdate);
+
+      // Verify the tree state doesn't contain orphaned range data
+      const treeState = renderer.getTreeState();
+      expect(treeState[0]).not.toHaveProperty("d");
+      expect(treeState[0][0]).toBeUndefined(); // Nested range should be gone
+
+      // Should NOT contain old items
+      expect(elseResult.html).not.toContain("Apple");
+      expect(elseResult.html).not.toContain("Banana");
+      expect(elseResult.html).not.toContain("<ul>");
+      expect(elseResult.html).not.toContain("<li");
+
+      // Should contain else content
+      expect(elseResult.html).toContain("<p>List is hidden</p>");
+    });
+
+    it("should handle transition back from else to nested range", () => {
+      // Start with else clause (ShowList=false)
+      const elseUpdate = {
+        s: ["<div>", "</div>"],
+        0: {
+          s: ["<p>List is hidden</p>"],
+        },
+      };
+      renderer.applyUpdate(elseUpdate);
+
+      // Transition to ShowList=true with items
+      const rangeUpdate = {
+        0: {
+          0: {
+            d: [
+              { 0: "item-1", 1: "New Item", _k: "item-1" },
+            ],
+            s: ['<li id="', '">', "</li>"],
+          },
+          s: ["<ul>", "</ul>"],
+        },
+      };
+      const rangeResult = renderer.applyUpdate(rangeUpdate);
+
+      // Should show the list now
+      expect(rangeResult.html).toContain("<ul>");
+      expect(rangeResult.html).toContain('<li id="item-1">New Item</li>');
+      expect(rangeResult.html).not.toContain("List is hidden");
+    });
+
+    it("should handle deeply nested range to non-range transition", () => {
+      // Initial: deeply nested structure with range at position 0.0.0
+      const initialUpdate = {
+        s: ["<main>", "</main>"],
+        0: {
+          s: ["<section>", "</section>"],
+          0: {
+            s: ["<div>", "</div>"],
+            0: {
+              // Range nested 3 levels deep
+              d: [
+                { 0: "deep-1", 1: "Deep Item 1", _k: "deep-1" },
+                { 0: "deep-2", 1: "Deep Item 2", _k: "deep-2" },
+              ],
+              s: ['<span id="', '">', "</span>"],
+            },
+          },
+        },
+      };
+      const initialResult = renderer.applyUpdate(initialUpdate);
+
+      expect(initialResult.html).toContain('<span id="deep-1">Deep Item 1</span>');
+      expect(initialResult.html).toContain('<span id="deep-2">Deep Item 2</span>');
+
+      // Replace the entire nested structure with simple content
+      const simpleUpdate = {
+        0: {
+          s: ["<p>No content</p>"],
+        },
+      };
+      const simpleResult = renderer.applyUpdate(simpleUpdate);
+
+      // All nested range data should be gone
+      expect(simpleResult.html).not.toContain("Deep Item");
+      expect(simpleResult.html).not.toContain("<span");
+      expect(simpleResult.html).toContain("<p>No content</p>");
+
+      // Verify tree state is clean
+      const treeState = renderer.getTreeState();
+      expect(treeState[0]).not.toHaveProperty("d");
+      expect(treeState[0][0]).toBeUndefined();
+    });
+  });
 });