I don't yet fully understand what is going on here, but I think I have
a fix (arguably, not very attractive) for the lockup problem: if I
replace the line

(pcomplete-opt "01234567ABCFGKLMNOPRSTUVWXZbcdfghiklmoprstuvwxz")

in the code for `pcomplete/tar' in pcmpl-gnu.el with

(pcomplete-here*
 (mapcar
  (lambda (char)
    (concat "-" (char-to-string char)))
  (string-to-list
   "01234567ABCFGKLMNOPRSTUVWXZbcdfghiklmoprstuvwxz")))

then I finally get the behavior I am after: typing "tar -" and
pressing TAB pops up a completions buffer with short options, and if I
press SPC now, the completions buffer is popped down (ditto for "tar
--").

The two versions seem to be equivalent modulo bookkeeping, except that
`pcomplete-here*' runs `pcomplete-try-first-hook'.  Why are they
operationally different?

Sasha
-- 
Oleksandr Manzyuk
http://oleksandrmanzyuk.wordpress.com