AR #32979 - 11.2 XST - "ERROR:HDLCompiler:637 - "<file>.vhd" Line xx: Net abcd[x] is constantly driven from multiple places"

Description

Keywords: XST, Spartan-6, Virtex-6, S6, V6, 11.2 , Parser, HDLCompiler:637, HDLCompiler:208

I get the following error in XST when targeting Virtex-6/Spartan-6 devices, but do not have any issues when I target older devices. Why?

ERROR:HDLCompiler:637 - "<file>.vhd" Line xx: Net state[7] is constantly driven from multiple places
ERROR:HDLCompiler:208 - "<file>.vhd" Line yy: Another driver from here

Example code:

library ieee;
use ieee.std_logic_1164.all;
use ieee.std_logic_unsigned.all;
use ieee.std_logic_arith.all;

entity ex_0008 is
port(clk,reset : in std_logic;
output : out std_logic_vector(7 downto 0)
);
end ex_0008;

architecture bhv of ex_0008 is
signal state : std_logic_vector(7 downto 0);
begin
process( reset , clk )
begin
if(reset = '1') then
output <= "00000000";
state <= "00000000";
elsif(clk'event and clk = '1') then
case state is
when "00000000" => output <= "00000001"; state <= "00000001";
when "00000001" => output <= "00000010"; state <= "00000010";
when "00000010" => output <= "00000011"; state <= "00000011";
when others => output <= "00000100"; state <= "00000000";
end case;
end if;
end process;

state <= not state;
end;