merge --no-ff on case insensitive when replacing case-changing file fails

Hi!

I don't yet have a reproduction recipe, but I think this is something that can be reproduced quickly. I'm on Mac OS X, using git 1.6.5.2.

On branch master I have a file named public/clippy/clippy.hx. I created a new branch from master, named ticket-726. On this branch, I replaced public/clippy with a new version, where clippy.hx was renamed to Clippy.hx (note capital C).

Merging with --no-ff from ticket-726 onto master results in:

$ git merge --no-ff ticket-726-clippy-from-page
Removing public/clippy.swf
Removing public/clippy/clippy.hx
Removing public/clippy/config.md
Removing public/clippy/library.swf
Removing public/clippy/swfmill
Merge made by recursive.
fatal: unable to read files to diff

After this, the tree is unclean:

$ git status
# On branch master
# Your branch is ahead of 'origin/master' by 9 commits.
#
# Changed but not updated:
#   (use "git add/rm <file>..." to update what will be committed)
#   (use "git checkout -- <file>..." to discard changes in working directory)
#
#       deleted:    public/clippy/Clippy.hx
#

If I merge without the --no-ff flag, the merge succeeds:

$ git merge ticket-726-clippy-from-page 
Updating 8527f71..f9f070d
Fast forward
...
 public/clippy/Clippy.hx                 |   45 +++++++++++++
...
 public/clippy/clippy.hx                 |   28 --------
...
 21 files changed, 312 insertions(+), 79 deletions(-)
...
 create mode 100644 public/clippy/Clippy.hx
...
 delete mode 100644 public/clippy/clippy.hx
...

Google didn't turn up anything, except the reference in the source code where this error message is defined. There was also a prior report of this bug http://collab.sakaiproject.org/pipermail/sakai-ux/2010-March/001058.html but I couldn't read anything interesting from it.

As noted above, I'm on Mac OS X, which has is case insensitive, but case preserving.

Thanks!
François Beausoleil