Hopefully this is a simple bug to fix.
Basically, when an observer block is placed down, and there is a solid block touching it (on the output side) — and a block is updated in front of the observer, the redstone signal from the observer is not powering the block touching the output side.
What I'm trying to do is have this happen (which should work):
Reed grows (block updates) --> observer detects --> observer sends signal from output --> powers adjacent solid block behind it --> powers redstone dust --> powers a piston

The cobblestone block should be getting powered right?
Hope this can be fixed!