semantics for F_{sub,rec} ??

In work on semantics of object oriented languages (as e.g. Kim Bruce's
recent book at MIT press) it turns out as useful to translate some basic
OOP languages into F_{sub,rec}, i.e. lambda calculus with bounded 
quantification over types and recursive types.
However, in most of these papers I couldn't find a semantics for F_{sub,rec}.
What comes most naturally to one's mind (at least to mine and that of a couple
of colleagues as well, I presume) are realizability models. If one interprets
types as complete expers, say, (as forcefully suggested in a paper by Mitchell 
and Viswanathan (ICALP'96)) it is more or less obvious that this way one gets

  (1)   an interpretation of bounded quantification  and

  (2)   bifree solutions of type equations of the form  A = F(A,A)
        where F is a mixed variant functor F : Ty^op x Ty -> Ty .

That's essentially the succus of the above mentioned article of Mitchell and
Viswanathan and the immediate reaction of people having worked in 
realizability semantics and SDT (like me) will be : well, yes, of course!

Thus, everything seems to be ok. At least I thought so for quite some time.
However, when looking more closely again into F_{sub,rec} I came to the 
conclusion that (1) and (2) above are not sufficient for interpreting the sort
of recursive types one finds in F_{sub,rec} simply because one want's to solve
type equations of the form A = T(A) where T(X) can NOT be written as F(X,X) 
for some mixed variant functor F : Ty^op x Ty -> Ty. A typical such example is

         A = T(A) := All X <: A. X -> Nat x X

because the natural candidate for a mixed variant functor F with T(A) = F(A,A)
would be

         F(B,A) = All X <: B. X -> Nat x X

and that is NOT functorial in B .
Well, it is when restricting to coercion maps but not for arbitrary f.

It is true that T may me considered as  T : TyL^op -> TyL  where TyL is the
lattice of complete expers under coercion (set inclusion). If T were covariant
(e.g. when  T(A) = Exist X <: A. X -> Nat x X) then Knaster-Tarski provides a 
solution to  A = T(A) (but not a bifree one! and therefore not supporting the 
usual desired reasoning principles for recusrive types). But, alas,  

          T(A) := All X <: A. X -> Nat x X

is contravariant and Knaster-Tarski doesn't help!

I know that people were playing some quite sophisticated tricks endowing the
collection of types with some metric and applying Banach's fixpoint theorem
to contractive mappings from types to types. Contractivity is usually ensured
by guardedness. This is ok when one wants to solve a single type equation 
without parameters. But if we try to solve

                  A = T(A,B)

this way it may depend on the parameter B whether  T(-,B)  is contractive.
This little observation is my main reason for having some doubts in the
applicability of the results of Bruce and Mitchell in their 1992 article

   PER models of subtyping, recursive types and higher order polymorphism

Well, summarizing my somewhat lengthy discussion above my QUESTION is whether
in the meantime people have found (good) models of F_{sub,rec} not suffering
from the "little" bugs I mentioned. I think that this question is of some
relevance because F_{sub,rec} is used intrinsically in contemporary work on
semantics of OOP and it would be a shame if it turns out as built on sand
(in the sense that it lacks a good semantics for the target language used in
these translational interpretations).

I apologize if some of my formulations may appear a bit provocative but I 
wanted to make my point as clear as possible. Needless to say that I would be
grateful for any clarification of the points I raised.

Thomas Streicher