Gist for issue https://github.com/jimweirich/rake/issues/129

console output (with --trace)

> cd ~/Work/gems/simple
> rake test --trace

** Invoke test (first_time)
** Execute test
<internal:lib/rubygems/custom_require>:29:in `require': no such file to load -- c:/Users/Matt/Work/gems/simple/allo (L
oadError)
        from <internal:lib/rubygems/custom_require>:29:in `require'
        from c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/rake_test_loader.rb:15:in `block in <main>'
        from c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/rake_test_loader.rb:4:in `select'
        from c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/rake_test_loader.rb:4:in `<main>'
rake aborted!
Command failed with status (1): [c:/Ruby/1.92/bin/ruby.exe -I"lib;test" -I"...]
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/file_utils.rb:53:in `block in create_shell_runner'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/file_utils.rb:45:in `call'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/file_utils.rb:45:in `sh'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/file_utils_ext.rb:39:in `sh'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/file_utils.rb:82:in `ruby'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/file_utils_ext.rb:39:in `ruby'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/testtask.rb:99:in `block (2 levels) in define'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/file_utils_ext.rb:60:in `verbose'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/testtask.rb:98:in `block in define'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/task.rb:205:in `call'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/task.rb:205:in `block in execute'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/task.rb:200:in `each'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/task.rb:200:in `execute'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/task.rb:158:in `block in invoke_with_call_chain'
c:/Ruby/1.92/lib/ruby/1.9.1/monitor.rb:201:in `mon_synchronize'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/task.rb:151:in `invoke_with_call_chain'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/task.rb:144:in `invoke'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:116:in `invoke_task'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:94:in `block (2 levels) in top_level'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:94:in `each'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:94:in `block in top_level'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:133:in `standard_exception_handling'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:88:in `top_level'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:66:in `block in run'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:133:in `standard_exception_handling'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/lib/rake/application.rb:63:in `run'
c:/Ruby/1.92/lib/ruby/gems/1.9.1/gems/rake-0.9.2.2/bin/rake:33:in `<top (required)>'
c:/Ruby/1.92/bin/rake:19:in `load'
c:/Ruby/1.92/bin/rake:19:in `<main>'
Tasks: TOP => test

lib\simple.rb

module Simple

end

lib\simple\simple.rb

module Simple

end

Rakefile

require 'rake/testtask'

Rake::TestTask.new do |t|
 t.libs << 'test'
end

desc "Run tests"
task :default => :test

simple.gemspec

# -*- encoding: utf-8 -*-
lib = File.expand_path('../lib', __FILE__)
$LOAD_PATH.unshift(lib) unless $LOAD_PATH.include?(lib)

Gem::Specification.new do |gem|
  gem.name          = "simple"
  gem.version       = "0.0.1"
  gem.authors       = ["Simple Author"]
  gem.email         = ["simple@email.com"]
  gem.homepage      = "http://simple.com"
  gem.summary       = "A simple test to show a bug in rake (with the test task at least)"
  gem.description   = <<-EOF
     This gem provides a simple example that exhibits the problems I have
     with rake test.
  EOF

  gem.files         = Dir.glob("lib/**/*.rb")
  gem.test_files    = Dir.glob("test/**/*.rb")
  gem.require_paths = ["lib"]

  gem.add_development_dependency 'rake'
end

simple\simple.gemspec

# -*- encoding: utf-8 -*-
lib = File.expand_path('../lib', __FILE__)
$LOAD_PATH.unshift(lib) unless $LOAD_PATH.include?(lib)

Gem::Specification.new do |gem|
  gem.name          = "simple"
  gem.version       = "0.0.1"
  gem.authors       = ["Simple Author"]
  gem.email         = ["simple@email.com"]
  gem.homepage      = "http://simple.com"
  gem.summary       = "A simple test to show a bug in rake (with the test task at least)"
  gem.description   = <<-EOF
     This gem provides a simple example that exhibits the problems I have
     with rake test.
  EOF

  gem.files         = Dir.glob("lib/**/*.rb")
  gem.test_files    = Dir.glob("test/**/*.rb")
  gem.require_paths = ["lib"]

  gem.add_development_dependency 'rake'
end

test\test_simple.rb

require 'test/unit'
require 'simple'

class TestSimple < Test::Unit::TestCase
  def test_simple
    assert_equal(1, 1)
  end
end

testtest_simple.rb

require 'test/unit'
require 'simple'

class TestSimple < Test::Unit::TestCase
  def test_simple
    assert_equal(1, 1)
  end
end