diff --git a/docs/rh-log.txt b/docs/rh-log.txt
index f868f4bf2..202792890 100644
--- a/docs/rh-log.txt
+++ b/docs/rh-log.txt
@@ -1,4 +1,7 @@
-September 1, 2009
+September 2, 2009  (Changes by Graf Zahl)
+- fixed: The newly altered WAD code could not load embedded WADs anymore.
+
+September 1, 2009
 - Added directory detection to the -file parameter. This obsoletes -dir, so
   that parameter is now gone.
 - Removed automatic ".wad" appending from FWadCollection::InitMultipleFiles()
diff --git a/src/w_wad.cpp b/src/w_wad.cpp
index 10352fd24..4d1d554d9 100644
--- a/src/w_wad.cpp
+++ b/src/w_wad.cpp
@@ -225,30 +225,33 @@ int FWadCollection::AddExternalFile(const char *filename)
 void FWadCollection::AddFile (const char *filename, FileReader *wadinfo)
 {
 	int startlump;
-	bool isdir;
+	bool isdir = false;
 
-	// Does this exist? If so, is it a directory?
-	struct stat info;
-	if (stat(filename, &info) != 0)
+	if (wadinfo == NULL)
 	{
-		Printf(TEXTCOLOR_RED "Could not stat %s\n", filename);
-		PrintLastError();
-		return;
-	}
-	isdir = (info.st_mode & S_IFDIR) != 0;
-
-	if (wadinfo == NULL && !isdir)
-	{
-		try
+		// Does this exist? If so, is it a directory?
+		struct stat info;
+		if (stat(filename, &info) != 0)
 		{
-			wadinfo = new FileReader(filename);
-		}
-		catch (CRecoverableError &err)
-		{ // Didn't find file
-			Printf (TEXTCOLOR_RED "%s\n", err.GetMessage());
-			PrintLastError ();
+			Printf(TEXTCOLOR_RED "Could not stat %s\n", filename);
+			PrintLastError();
 			return;
 		}
+		isdir = (info.st_mode & S_IFDIR) != 0;
+
+		if (!isdir)
+		{
+			try
+			{
+				wadinfo = new FileReader(filename);
+			}
+			catch (CRecoverableError &err)
+			{ // Didn't find file
+				Printf (TEXTCOLOR_RED "%s\n", err.GetMessage());
+				PrintLastError ();
+				return;
+			}
+		}
 	}
 
 	Printf (" adding %s", filename);
@@ -294,7 +297,7 @@ void FWadCollection::AddFile (const char *filename, FileReader *wadinfo)
 				FileReader *embedded = lump->NewReader();
 				strcpy(wadstr, lump->FullName);
 
-				AddFile(wadstr, embedded);
+				AddFile(path, embedded);
 			}
 		}
 		return;