Just had to deal with a nasty cross-UNIX/Windows problem.
Two files in the repository were in the same directory and had the same name differing only by the case of some of the letters. While checking them out, git wantonly confused them (conflated them into one) and got confused about them.
I know it's an outlandish situation. Still, when git is in a case-insensitive file system, it should at least check for this.