diff -r 1253703853a8 -r 0a95d0e83b4c mercurial/ui.py
--- a/mercurial/ui.py	Wed Mar 14 11:46:07 2007 -0700
+++ b/mercurial/ui.py	Wed Mar 14 22:43:57 2007 +0100
@@ -361,7 +361,7 @@
 
     def expandpath(self, loc, default=None):
         """Return repository location relative to cwd or from [paths]"""
-        if "://" in loc or os.path.isdir(loc):
+        if "://" in loc or os.path.isdir(os.path.join(loc, '.hg')):
             return loc
 
         path = self.config("paths", loc)