aliases causing “Permission denied” error in git v1.7

Hi!

$ git co -b newbranch
$ git co oldbranch

results in "fatal: cannot exec 'git-co': Permission denied" error.

In the same time, things like

$ git checkout -b newbranch
$ git checkout oldbranch

and

$ sudo git co -b newbranch
$ sudo git co oldbranch

work as expected. Ownership rights for the .git die are set for the user
and 0755/0644 are the mode for .git dir/subdir/files. There are no git-co
script anywhere in the system (as it is an alias to git-checkout, which
resides in /usr/libexec/git-core).

Aliases are defined in .gitconfig of the home dir:

[alias]
co = checkout

There is no difference in git config for root or normal user.

Things work well as expected when I install git v1.6. Going back to 1.7
gives me the same error.

What am I missing?

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Gentoo / kernel v3.0.6 / git v1.7.3.4