File not found

I am using Delphi 2010. An application that up until now has compiled happily suddenly can' find files unless I add them to the project search path.

The files in question have their path already in Delphi's Tools|Options|Library - Win32 Library path and the path is present in  the project option's Search Path Inherit Values section.

So what's going on?

File not found: 'LocaleInit'

The path to this file in Delphi's Library - Win32 is '$(WORKSPACE)\project\global'
WORKSPACE is defined in Delphi's registry ..\bds\7.0\Environment Options
The path is present in the inherited section of the project's options search path.
Who is Participating?
RodbachConnect With a Mentor Author Commented:
I've found a solution to my problem.

If I change the path in the library to an absolute path without using the variable in the name then the application compiles with no problem.

What I don't understand is that if I then change it back to its original state, i.e., with the variable, then it continues to compile with no errors.

The wonders of Delphi!
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