Problem with vimdiff and file name resolution

On one of the Linux machines on which I run Vim we run a backup
program which creates hourly and nightly backups of each user's home
directory in ~/.snapshot. The problem is that when I try to view
the differences between a file and its backup copy using vimdiff,
vimdiff resolves both file names to the same file.

For example, the following command,

$ vimdiff -N -u NONE -i NONE .snapshot/nightly.0/.configfiles/profile.common .configfiles/profile.common

creates two vertically-split windows, but both windows contain the
same file, .snapshot/nightly.0/.configfiles/profile.common.

I can view the differences by using just diff instead,

$ diff .snapshot/nightly.0/.configfiles/profile.common .configfiles/profile.common

and ls also shows them to be different files:

$ ls -l .snapshot/nightly.0/.configfiles/profile.common .configfiles/profile.common
-rwx------ 1 gary gary 3523 Jul 9 13:09 .configfiles/profile.common
-rwx------ 1 gary gary 2992 Jul 7 10:07 .snapshot/nightly.0/.configfiles/profile.common

This seems like a bug.

I'm running 7.4.283 on Fedora 17 Linux.

Regards,
Gary

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