For !WIN32 systems the fix was in ED_fileselect_set_params (basically adding the first folder in the sfile->folders_prev list) For WIN32: I talked with Nathan (Jesterking) and he agreed that the fix in path_util.c was required too. Without that BLI_path_abs was always making WIN32 paths ending with \ to end with \\ (e.g. C:\Blender\ --> C:\Blender\\) And this was making the folder to fail ISDIR tests.