Off the top of my head, I am inclined to agree with this suggestion, which in turn suggests that Si is flawed. We need a variant of Si which allows Douglas_Knight's simple fair coins, without thereby offering a simple explanation of everything. Or, we need to discard the whole Si concept as inappropriate in our non-deterministic universe.
I don't think the universe shows any signs of being non-deterministic. The laws of physics as we understand them (e.g. the wave equation) are deterministic. So, Solomonoff induction is not broken.
Hmmm. Would you be happier if I changed my last line to read "... we need to discard the whole Si concept as inappropriate to our imperfectly-observed universe."?
You're about to flip a quantum coin a million times (these days you can even do it on the internet). What's your estimate of the K-complexity of the resulting string, conditional on everything else you've observed in your life so far? The Born rule, combined with the usual counting argument, implies you should say "about 1 million". The universal prior implies you should say "substantially less than 1 million". Which will it be?
EDIT: Wei Dai's comment explains why this post is wrong.