SELECT DISTINCT ... ORDER BY UPPER(column_name) fails

On pgsql 8.2, if you do the following query, everything is fine:

SELECT DISTINCT tag FROM logs ORDER BY tag;

But if you'd like to do a case insensitive order by like this:

SELECT DISTINCT tag FROM logs ORDER BY UPPER(tag);

or

SELECT DISTINCT tag FROM logs ORDER BY LOWER(tag);

You get the following error message :
for SELECT DISTINCT, ORDER BY expressions must appear in select list.

It is weird as the order by column appears in the select.

Any thoughts?