I'm a third-year Computer Science undergrad at the University of Warwick, UK., and am a long-time Arduino enthusiast. For my final-year project (titled 'Microscheme'), I've been working on a compiler for Scheme, specifically targeting the Arduino. (The Atmel-based ones).
It is not an industrial-grade compiler, and it will never out-perform C. However, the Arduino platform is all about hacking and doing novel things with electronics, so why not throw some functional programming into the mix.
You can download the compiler, and read a lot more about the project at http://microscheme.org/
If even one fellow Arduino user plays with this, writes a useful program, or learns a bit about functional programming through it then I'll be over the proverbial moon. I plan to keep developing it in the long-run.
Enjoy!, and feel free to send me any feedback you want.
p.s., I won't be able to release the source code until after my dissertation is handed in and marked, but after that it will be a full-blown free open source project...