diff --git a/Locations.hs b/Locations.hs
index 425e4fdcf9..fb5ee517ee 100644
--- a/Locations.hs
+++ b/Locations.hs
@@ -75,7 +75,10 @@ annexLocations key = [using hashDirMixed, using hashDirLower]
 gitAnnexLocation :: Key -> Git.Repo -> IO FilePath
 gitAnnexLocation key r
 	| Git.repoIsLocalBare r =
-		go (Git.workTree r) $ annexLocations key
+		-- bare repositories default to hashDirLower for new
+		-- content, as it's more portable, so check locations
+		-- in reverse order
+		go (Git.workTree r) $ reverse $ annexLocations key
 	| otherwise =
 		go (Git.workTree r </> ".git") $ annexLocations key
 	where
diff --git a/debian/changelog b/debian/changelog
index 9cd915885c..8da74af2f7 100644
--- a/debian/changelog
+++ b/debian/changelog
@@ -1,7 +1,11 @@
 git-annex (3.20111123) UNRELEASED; urgency=low
 
-  * Put a workaround in the directory special remote for strange behavior
-    with VFAT filesystems on Linux (mounted with shortname=mixed)
+  * The VFAT filesystem on recent versions of Linux, when mounted with
+    shortname=mixed, does not get along well with git-annex's mixed case
+    .git/annex/objects hash directories. To better support it, bare
+    repositories (and the directory special remote) now store content
+    in all-lowercase hash directories. Mixed case hash directories are
+    still used for non-bare directories, which cannot be put in VFAT.
   * Flush json output, avoiding a buffering problem that could result in
     doubled output.
   * Avoid needing haskell98 and other fixes for new ghc. Thanks, Mark Wright.
diff --git a/doc/bugs/directory_remote_and_case_sensitivity_on_FAT.mdwn b/doc/bugs/case_sensitivity_on_FAT.mdwn
similarity index 95%
rename from doc/bugs/directory_remote_and_case_sensitivity_on_FAT.mdwn
rename to doc/bugs/case_sensitivity_on_FAT.mdwn
index ae653d6197..cb3424e34d 100644
--- a/doc/bugs/directory_remote_and_case_sensitivity_on_FAT.mdwn
+++ b/doc/bugs/case_sensitivity_on_FAT.mdwn
@@ -42,4 +42,5 @@ I wonder if the directory remote should use hashDirLower instead of hashDirMixed
 >> and for the even more unlikely configuration of a rsync special remote
 >> stored on VFAT. --[[Joey]] 
 
-[[!meta title="bare git repository not supported on VFAT"]]
+>>> Bare repositories now use lowercase. rsync is the only remaining
+>>> unsupported possibility. --[[Joey]]