Index: tools/build/v2/engine/src/search.c
===================================================================
--- tools/build/v2/engine/src/search.c	(revision 80)
+++ tools/build/v2/engine/src/search.c	(working copy)
@@ -188,6 +188,7 @@
         /* Look for the obvious */
         /* This is a questionable move.  Should we look in the */
         /* obvious place if SEARCH is set? */
+        file_info_t *ff;
 
         f->f_root.ptr = 0;
         f->f_root.len = 0;
@@ -198,7 +199,10 @@
         if ( DEBUG_SEARCH )
             printf( "search %s: %s\n", target, buf->value );
 
-        timestamp( buf->value, time );
+        if ( file && ( ff = file_query(buf->value) ) && !ff->is_file )  /* we expect file but the path exists and is not a file */
+            *time = 0;  /* make the caller assume T_BIND_MISSING */
+        else
+            timestamp( buf->value, time );
     }
 
     boundname = newstr( buf->value );