Rails 2.3.8 to Rails 3 - nested layouts

The following code works great in Rails 2.3.8

layouts/application.html.haml
...
           .secondary-navigation

              = yield :secondary_nav

              .clear

...

layouts/admin.html.haml

- content_for :secondary_nav do

  = navigation :second_level_admin

= render :file => "layouts/application"

As can be seen, I have admin layout nested within application layout.

Rails 3 just plain refuses to render the admin layout. Please help.