returns setof rec... simple exampe doesn't work

I've googled this one and tried everything (except the correct solution
of course) until tears are starting to flow. Please help. Complete
example below. 7.4.13 on suse-64 x86

create table mytable (mystring varchar, myreal real);

insert into mytable (mystring,myreal) values ('abc',1.23);

insert into mytable (mystring,myreal) values ('def',4.56);

create type myrec as (mystring varchar, myreal real);

create or replace function myfunc() returns setof myrec as '

declare

crec myrec;

begin

for crec in select * from mytable loop

return next crec;

end loop;

return;

end;

' language 'plpgsql';

stdb=# select myfunc();

ERROR: set-valued function called in context that cannot accept a set

CONTEXT: PL/pgSQL function "myfunc" line 6 at return next