diff --git a/ChangeLog b/ChangeLog
--- a/ChangeLog
+++ b/ChangeLog
@@ -1,3 +1,6 @@
+2014-11-03 v5.2.1.1
+        * Fix `findCabalFiles` thinking `$HOME/.cabal` is a cabal file.
+
 2014-11-02 v5.2.1.0
         * Fix `newTempDir` on Windows
         * GhcModT's liftIO instance now converts GhcMOdError exceptions
diff --git a/Language/Haskell/GhcMod/CaseSplit.hs b/Language/Haskell/GhcMod/CaseSplit.hs
--- a/Language/Haskell/GhcMod/CaseSplit.hs
+++ b/Language/Haskell/GhcMod/CaseSplit.hs
@@ -71,8 +71,8 @@
 getSrcSpanTypeForFnSplit modSum lineNo colNo = do
     p@ParsedModule{pm_parsed_source = _pms} <- G.parseModule modSum
     tcm@TypecheckedModule{tm_typechecked_source = tcs} <- G.typecheckModule p
-    let varPat  = find isPatternVar $ listifySpans tcs (lineNo, colNo) :: Maybe (LPat Id)
-        match:_ = listifySpans tcs (lineNo, colNo) :: [Gap.GLMatchI]
+    let varPat = find isPatternVar $ listifySpans tcs (lineNo, colNo) :: Maybe (LPat Id)
+        match  = last $ listifySpans tcs (lineNo, colNo) :: Gap.GLMatchI
     case varPat of
       Nothing  -> return Nothing
       Just varPat' -> do
@@ -188,8 +188,11 @@
                                        , sVarSpan = sVS, sTycons = sT })  =
   let bindingText = getBindingText text sBS
       difference  = srcSpanDifference sBS sVS
-      replaced    = concatMap (replaceVarWithTyCon bindingText difference sVN) sT
-   in T.unpack $ T.intercalate (T.pack "\n") replaced
+      replaced    = map (replaceVarWithTyCon bindingText difference sVN) sT
+      -- The newly generated bindings need to be indented to align with the
+      -- original binding.
+      replaced'   = head replaced : map (indentBindingTo sBS) (tail replaced)
+   in T.unpack $ T.intercalate (T.pack "\n") (concat replaced')
 
 getBindingText :: [T.Text] -> SrcSpan -> [T.Text]
 getBindingText text srcSpan =
@@ -220,3 +223,9 @@
                                then T.take vsc line `T.append` tycon'' `T.append` T.drop vec line
                                else T.replicate spacesToAdd (T.pack " ") `T.append` line)
               [0 ..] text
+
+indentBindingTo :: SrcSpan -> [T.Text] -> [T.Text]
+indentBindingTo bndLoc binds =
+  let Just (_,sl,_,_) = Gap.getSrcSpan bndLoc
+      indent      = (T.replicate (sl - 1) (T.pack " ") `T.append`)
+   in indent (head binds) : tail binds
diff --git a/Language/Haskell/GhcMod/Cradle.hs b/Language/Haskell/GhcMod/Cradle.hs
--- a/Language/Haskell/GhcMod/Cradle.hs
+++ b/Language/Haskell/GhcMod/Cradle.hs
@@ -32,7 +32,7 @@
 
 cabalCradle :: FilePath -> IO Cradle
 cabalCradle wdir = do
-    Just cabalFile <- findCabalFiles wdir
+    Just cabalFile <- findCabalFile wdir
     let cabalDir = takeDirectory cabalFile
     pkgDbStack <- getPackageDbStack cabalDir
     tmpDir <- newTempDir cabalDir
diff --git a/Language/Haskell/GhcMod/Error.hs b/Language/Haskell/GhcMod/Error.hs
--- a/Language/Haskell/GhcMod/Error.hs
+++ b/Language/Haskell/GhcMod/Error.hs
@@ -30,8 +30,9 @@
                  -- ^ Launching an operating system process failed. The first
                  -- field is the command.
                  | GMENoCabalFile
+                 -- ^ No cabal file found.
                  | GMETooManyCabalFiles [FilePath]
-                 -- ^ No or too many cabal files found.
+                 -- ^ Too many cabal files found.
                    deriving (Eq,Show,Typeable)
 
 instance Exception GhcModError
diff --git a/Language/Haskell/GhcMod/Monad.hs b/Language/Haskell/GhcMod/Monad.hs
--- a/Language/Haskell/GhcMod/Monad.hs
+++ b/Language/Haskell/GhcMod/Monad.hs
@@ -99,7 +99,7 @@
 #endif
 import Control.Monad.Journal.Class
 
-import Data.Maybe (fromJust, isJust)
+import Data.Maybe (isJust)
 import Data.IORef (IORef, readIORef, writeIORef, newIORef)
 import System.Directory (getCurrentDirectory)
 
@@ -166,7 +166,7 @@
 
      where
        fromEx :: Exception e => SomeException -> e
-       fromEx = fromJust . fromException
+       fromEx se = let Just e = fromException se in e
        isIOError se =
            case fromException se of
              Just (_ :: IOError) -> True
@@ -221,7 +221,8 @@
     cabal = isJust mCabalFile
     ghcopts = ghcUserOptions opt
     withCabal = do
-        pkgDesc <- parseCabalFile c $ fromJust mCabalFile
+        let Just cabalFile = mCabalFile
+        pkgDesc <- parseCabalFile c cabalFile
         compOpts <- getCompilerOptions ghcopts c pkgDesc
         initSession CabalPkg opt compOpts
     withSandbox = initSession SingleFile opt compOpts
diff --git a/Language/Haskell/GhcMod/PathsAndFiles.hs b/Language/Haskell/GhcMod/PathsAndFiles.hs
--- a/Language/Haskell/GhcMod/PathsAndFiles.hs
+++ b/Language/Haskell/GhcMod/PathsAndFiles.hs
@@ -28,24 +28,32 @@
 -- is assumed to be the project directory. If only one cabal file exists in this
 -- directory it is returned otherwise @findCabalFiles@ throws 'GMENoCabalFile'
 -- or 'GMETooManyCabalFiles'
-findCabalFiles :: FilePath -> IO (Maybe FilePath)
-findCabalFiles directory = do
-    -- Look for cabal files in all parent directories of @dir@
+findCabalFile :: FilePath -> IO (Maybe FilePath)
+findCabalFile directory = do
+    -- Look for cabal files in @dir@ and all it's parent directories
     dcs <- getCabalFiles `zipMapM` parents directory
     -- Extract first non-empty list, which represents a directory with cabal
     -- files.
-    case find (not . null) $ uncurry makeAbsolute `map` dcs of
+    case find (not . null) $ uncurry appendDir `map` dcs of
       Just []          -> throw $ GMENoCabalFile
       Just cfs@(_:_:_) -> throw $ GMETooManyCabalFiles cfs
       a  -> return $ head <$> a
+ where
+   appendDir :: DirPath -> [FileName] -> [FilePath]
+   appendDir dir fs = (dir </>) `map` fs
 
 -- | @getCabalFiles dir@. Find all files ending in @.cabal@ in @dir@.
 getCabalFiles :: DirPath -> IO [FileName]
 getCabalFiles dir =
-    filter ((==) ".cabal" . takeExtension) <$> getDirectoryContents dir
+    filterM isCabalFile =<< getDirectoryContents dir
+ where
+   isCabalFile f = do
+     exists <- doesFileExist $ dir </> f
+     return (exists && takeExtension' f == ".cabal")
 
-makeAbsolute :: DirPath -> [FileName] -> [FilePath]
-makeAbsolute dir fs = (dir </>) `map` fs
+   takeExtension' p = if takeFileName p == takeExtension p
+                        then ""
+                        else takeExtension p
 
 zipMapM :: Monad m => (a -> m c) -> [a] -> m [(a,c)]
 zipMapM f as = mapM (\a -> liftM (a,) $ f a) as
diff --git a/elisp/ghc-info.el b/elisp/ghc-info.el
--- a/elisp/ghc-info.el
+++ b/elisp/ghc-info.el
@@ -127,7 +127,7 @@
 (defun ghc-expand-th ()
   (interactive)
   (let* ((file (buffer-file-name))
-	 (cmds (list "expand" file "-b" "\n"))
+	 (cmds (list "expand" file))
 	 (source (ghc-run-ghc-mod cmds)))
     (when source
       (ghc-display
diff --git a/elisp/ghc.el b/elisp/ghc.el
--- a/elisp/ghc.el
+++ b/elisp/ghc.el
@@ -28,7 +28,7 @@
 	       (< emacs-minor-version minor)))
       (error "ghc-mod requires at least Emacs %d.%d" major minor)))
 
-(defconst ghc-version "5.2.1.0")
+(defconst ghc-version "5.2.1.1")
 
 ;; (eval-when-compile
 ;;  (require 'haskell-mode))
diff --git a/ghc-mod.cabal b/ghc-mod.cabal
--- a/ghc-mod.cabal
+++ b/ghc-mod.cabal
@@ -1,5 +1,5 @@
 Name:                   ghc-mod
-Version:                5.2.1.0
+Version:                5.2.1.1
 Author:                 Kazu Yamamoto <kazu@iij.ad.jp>
                         Daniel Gröber <dxld@darkboxed.org>
                         Alejandro Serrano <trupill@gmail.com>
@@ -34,6 +34,7 @@
                         test/data/broken-cabal/cabal.sandbox.config.in
                         test/data/broken-sandbox/*.cabal
                         test/data/broken-sandbox/cabal.sandbox.config
+                        test/data/case-split/*.hs
                         test/data/cabal-flags/*.cabal
                         test/data/check-test-subdir/*.cabal
                         test/data/check-test-subdir/src/Check/Test/*.hs
diff --git a/test/CabalApiSpec.hs b/test/CabalApiSpec.hs
--- a/test/CabalApiSpec.hs
+++ b/test/CabalApiSpec.hs
@@ -3,7 +3,6 @@
 module CabalApiSpec where
 
 import Control.Applicative
-import Data.Maybe
 import Language.Haskell.GhcMod.CabalApi
 import Language.Haskell.GhcMod.Cradle
 import Language.Haskell.GhcMod.Types
@@ -35,7 +34,8 @@
             cwd <- getCurrentDirectory
             withDirectory "test/data/subdir1/subdir2" $ \dir -> do
                 crdl <- findCradle
-                pkgDesc <- runD $ parseCabalFile crdl $ fromJust $ cradleCabalFile crdl
+                let Just cabalFile = cradleCabalFile crdl
+                pkgDesc <- runD $ parseCabalFile crdl cabalFile
                 res <- runD $ getCompilerOptions [] crdl pkgDesc
                 let res' = res {
                         ghcOptions  = ghcOptions res
diff --git a/test/PathsAndFilesSpec.hs b/test/PathsAndFilesSpec.hs
--- a/test/PathsAndFilesSpec.hs
+++ b/test/PathsAndFilesSpec.hs
@@ -8,6 +8,7 @@
 #endif
 
 import System.Directory
+import System.Environment
 import System.FilePath ((</>))
 import Test.Hspec
 
@@ -28,3 +29,14 @@
 
         it "returns Nothing if the sandbox config file is broken" $ do
             getSandboxDb "test/data/broken-sandbox" `shouldReturn` Nothing
+
+    describe "getCabalFiles" $ do
+        it "doesn't think $HOME/.cabal is a cabal file" $ do
+            (getCabalFiles =<< getEnv "HOME") `shouldReturn` []
+
+    describe "findCabalFile" $ do
+        it "works" $ do
+            findCabalFile "test/data" `shouldReturn` Just "test/data/cabalapi.cabal"
+
+        it "finds cabal files in parent directories" $ do
+            findCabalFile "test/data/subdir1/subdir2" `shouldReturn` Just "test/data/cabalapi.cabal"
diff --git a/test/data/case-split/Vect.hs b/test/data/case-split/Vect.hs
new file mode 100644
--- /dev/null
+++ b/test/data/case-split/Vect.hs
@@ -0,0 +1,39 @@
+{-# LANGUAGE DataKinds, TypeFamilies, TypeOperators, GADTs, KindSignatures #-}
+
+module Vect where
+
+data Nat = Z | S Nat
+
+type family   (n :: Nat) :+ (m :: Nat) :: Nat
+type instance Z :+ m = m
+type instance S n :+ m = S (n :+ m)
+
+data Vect :: Nat -> * -> * where
+  VNil :: Vect Z a
+  (:::) :: a -> Vect n a -> Vect (S n) a
+
+vAppend :: Vect n a -> Vect m a -> Vect (n :+ m) a
+vAppend x y = _vAppend_body
+
+lAppend :: [a] -> [a] -> [a]
+lAppend x y = _lAppend_body
+
+data MyList a = Nil | Cons a (MyList a)
+
+mlAppend :: MyList a -> MyList a -> MyList a
+mlAppend x y = _mlAppend_body
+
+mlAppend2 :: MyList a -> MyList a -> MyList a
+mlAppend2 x y = case x of
+                  x' -> _mlAppend_body
+
+mlReverse :: MyList a -> MyList a
+mlReverse xs = mlReverse' xs Nil
+  where
+    mlReverse' :: MyList a -> MyList a -> MyList a
+    mlReverse' xs' accum = _mlReverse_body
+
+mlReverse2 :: MyList a -> MyList a
+mlReverse2 xs = let mlReverse' :: MyList a -> MyList a -> MyList a
+                    mlReverse' xs' accum = _mlReverse_body
+                 in mlReverse' xs Nil