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From: Eli Zaretskii <eliz@gnu.org>
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Subject: Re: setenv and find-file
Date: Sat, 18 May 2013 10:34:21 +0300
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> From: Doug Lewan <dougl@shubertticketing.com>
> Date: Fri, 17 May 2013 21:07:51 +0000
> 
> In shell:
>     $ echo ${VARIABLE}
>     /a/very/long/path
>     $ emacs &
> Inside emacs:
>     C-x C-f ${VARIABLE}/to/work                <== Finds "/a/very/long/path/to/work".
>     (setenv "VARIABLE" "/shorter/path")
>         => "/shorter/path"
>     M-! echo ${VARIABLE}
>     "/shorter/path"
>     M-x shell
> In shell inside emacs:
>     $ echo ${VARIABLE}
>     "/shorter/path"
> Back in emacs:
>     C-x C-f ${VARIABLE}/to/Grandmothers/house
> This finds the file "/a/very/long/path/to/Grandmothers/house", where I sort of expect it to find "/shorter/path/to/Grandmothers/house".

I cannot reproduce this.  What version of Emacs is this, and on what
OS?