Currently, borrows last for block scope, which is why this doesn't work. There is a feature in the making called SEME (single entry, multiple exit) which will

Currently, borrows last for block scope, which is why this doesn't work. There is a feature in the making called SEME (single entry, multiple exit) which will resolve this and other annoying borrow hazards. It at least at one point was considered a priority for 1.0.