Yes there are a lot of issues with cross-language compilers. That said, Coffeescript: http://coffeescript.org, which compiles its own language to Javascript has had a lot of success and is being used in production. So it's at least possible to use languages like this.
The extra layer of abstraction is a big hurdle. When debugging you have to find the source of the problem in the PHP, though ideally after that you can just find the matching Pharen code and go from there. One of the things on my todo list is to have at least a rough line-to-line tracker built, so that it could at least tell you the general location a problem happened, if not the exact line.
Translating docs and example code for existing libraries into Pharen is a bigger issue, I think. Mainly because Pharen emphasizes a functional style of coding while most PHP code assumes you are doing things imperatively. This is something Clojure has to deal with in terms of Java interop so again it shouldn't be too hard to get around.
In terms of efficiency there is tail recursion optimization (converts a recursive function to having a while loop at the end) and a persistent sequence library in the works that would make functional looping through a list about as fast as imperative iteration. More aggressive optimizations might come in the future.
If you're interested, feel free to contribute: http://scriptor.github.com/pharen/contribute.html. If you use IRC you can come hang out (or berate me personally) on #pharen on Freenode. Any suggestions or ideas are welcome.