I noticed a bug in the project directory handling. You should be able to recreate this fairly easily:

create 2 directories:
kw
kw.egg-info

When you setup a project for that, you will see that any files in kw.egg-info will be listed as being in kw/ (likely due to the period in the directory name).

Let me know if you need more information.

Thanks,
–Mike.

This is now fixed in 20091002

Confirmed, this now works! Thanks much.