--- octave-3.8.0-orig/scripts/pkg/private/install.m	2013-12-28 08:57:42.000000000 +1100
+++ octave-3.8.0/scripts/pkg/private/install.m	2014-02-10 00:59:40.747194765 +1100
@@ -63,6 +63,14 @@
       tgz = files{i};
 
       if (exist (tgz, "file"))
+      ## The filename pointed to an uncompressed package to begin with.
+      if (exist (tgz, "dir"))
+        if (tgz(1) == '/')
+          packdir = tgz;
+        else
+          packdir = fullfile (pwd(), tgz);
+        endif
+      elseif (exist (tgz, "file"))
         ## Create a temporary directory.
         tmpdir = tmpnam ();
         tmpdirs{end+1} = tmpdir;
@@ -89,20 +97,12 @@
         if (length (dirlist) > 3)
           error ("bundles of packages are not allowed");
         endif
-      endif
 
-      ## The filename pointed to an uncompressed package to begin with.
-      if (exist (tgz, "dir"))
-        dirlist = {".", "..", tgz};
+        ## The two first entries of dirlist are "." and "..".
+        packdir = fullfile (tmpdir, dirlist{3});
       endif
 
       if (exist (tgz, "file") || exist (tgz, "dir"))
-        ## The two first entries of dirlist are "." and "..".
-        if (exist (tgz, "file"))
-          packdir = fullfile (tmpdir, dirlist{3});
-        else
-          packdir = fullfile (pwd (), dirlist{3});
-        endif
         packdirs{end+1} = packdir;
 
         ## Make sure the package contains necessary files.