git-add says 'pathspec did not match any files' for git repository in /

Hey folks,

I've been using git for keeping config files using a repository in /.
In 1.7.4.1, this seems to be broken again. Committing, diffing and
status work this time, but git add gives a pathspec did not match any
files error when adding a file while the current working directory is
not /.

This is best illustrated by an example:

root@ldap:/# git init
Initialized empty Git repository in /.git/
root@ldap:/# cd etc/
root@ldap:/etc# gt add fstab 
bash: gt: command not found
root@ldap:/etc# git add fstab
fatal: pathspec 'fstab' did not match any files
root@ldap:/etc# ls -l fstab 
-rw-r--r-- 1 root root 37 Mar 24 16:58 fstab
root@ldap:/etc# cd /
root@ldap:/# git add /etc/fstab
root@ldap:/etc# git --version 
git version 1.7.4.1


All of this worked properly in 1.7.1. There was a different problem in
1.7.2, but that was fixed then (and with that fix, the above problem
didn't occur). I haven't tested 1.7.3.

I don't have time to fix this right now, so I'll be sticking to 1.7.1
for now. Perhaps someone else want to look into this.

Gr.

Matthijs