Index: subversion/libsvn_subr/path.c
===================================================================
--- subversion/libsvn_subr/path.c	(revision 11924)
+++ subversion/libsvn_subr/path.c	(working copy)
@@ -721,7 +721,7 @@
     return NULL;
 
   /* Look for the sequence '://' */
-  for (j = 0; j < len - 3; j++)
+  for (j = 0; j < len - 2; j++)
     {
       /* We hit a '/' before finding the sequence. */
       if (path[j] == '/')
@@ -1140,11 +1140,17 @@
     {
       *(dst++) = *(src++);
 
+      /*
+       * In a file: URI, an empty host is implicit `localhost' and so counts as
+       * a first segment. Can URIs of other types have an empty host?
+       */
+      if (uri)
+	++canon_segments;
 #if defined(WIN32) || defined(__CYGWIN__)
       /* On Windows permit two leading separator characters which means an
        * UNC path.  However, a double slash in a URI after the scheme is never
        * valid. */
-      if (!uri && *src == '/')
+      else if (*src == '/')
         *(dst++) = *(src++);
 #endif /* WIN32 or Cygwin */
       
@@ -1180,7 +1186,7 @@
     }
 
   /* Remove the trailing slash. */
-  if ((canon_segments > 0 || uri) && *(dst - 1) == '/')
+  if (canon_segments > 0 && *(dst - 1) == '/')
     dst--;
   
   *dst = '\0';
Index: subversion/libsvn_ra_local/split_url.c
===================================================================
--- subversion/libsvn_ra_local/split_url.c	(revision 11924)
+++ subversion/libsvn_ra_local/split_url.c	(working copy)
@@ -48,22 +48,31 @@
      everything from that '/' until the end of the URL to be the
      absolute path portion of the URL. */
   hostname = URL + 7;
-  path = strchr (hostname, '/');
-  if (! path)
-    return svn_error_createf 
-      (SVN_ERR_RA_ILLEGAL_URL, NULL, 
-       _("Local URL '%s' contains only a hostname, no path"), URL);
-
-  /* Treat localhost as an empty hostname. */
-  if (hostname != path)
+  if (*hostname == '\0')
     {
-      hostname = svn_path_uri_decode (apr_pstrmemdup (pool, hostname,
-                                                     path - hostname), pool);
-        if (strncmp (hostname, "localhost", 9) == 0)
-	  hostname = NULL;
+      hostname = NULL;
+      path = "/";
     }
   else
-    hostname = NULL;
+    {
+      path = strchr (hostname, '/');
+
+      /* Treat localhost as an empty hostname. */
+      if (hostname != path)
+	{
+	  if (path)
+	    hostname =
+	      svn_path_uri_decode (apr_pstrmemdup (pool, hostname,
+						   path - hostname), pool);
+	  else
+	    path = "/";
+
+	  if (strncmp (hostname, "localhost", 9) == 0)
+	    hostname = NULL;
+	}
+      else
+	hostname = NULL;
+    }
   
 #ifndef WIN32
   /* Currently, the only hostnames we are allowing on non-Win32 platforms
Index: subversion/tests/libsvn_subr/path-test.c
===================================================================
--- subversion/tests/libsvn_subr/path-test.c	(revision 11924)
+++ subversion/tests/libsvn_subr/path-test.c	(working copy)
@@ -154,6 +154,9 @@
     "http://svn.collab.net/repos/svn",
     "scheme/with://slash/",
     "file:///path/to/repository",
+    "file:///",
+    "file://",
+    "file:/",
   };
 
   /* Expected results of the tests. */
@@ -162,7 +165,11 @@
     FALSE,
     TRUE,
     FALSE,
-    TRUE };
+    TRUE,
+    TRUE,
+    TRUE,
+    FALSE,
+  };
 
   *msg = "test svn_path_is_url";
 
@@ -652,6 +659,10 @@
     { "http://hst",           "http://hst" },
     { "http://hst/foo/../bar","http://hst/foo/../bar" },
     { "http://hst/",          "http://hst" },
+    { "file:///",             "file://" },
+    { "file://",              "file://" },
+    { "file:///usr/",         "file:///usr" },
+    { "file:///usr",          "file:///usr" },
 #if defined(WIN32) || defined(__CYGWIN__)
     /* We permit UNC paths on Windows.  By definition UNC
      * paths must have two components so we should remove the