diff --git a/fml/common/cpw/mods/fml/common/ModContainerFactory.java b/fml/common/cpw/mods/fml/common/ModContainerFactory.java
index e0e8f5fd2..6aba285cf 100644
--- a/fml/common/cpw/mods/fml/common/ModContainerFactory.java
+++ b/fml/common/cpw/mods/fml/common/ModContainerFactory.java
@@ -5,6 +5,7 @@ import java.util.regex.Pattern;
 
 import org.objectweb.asm.Type;
 
+import cpw.mods.fml.common.discovery.ModCandidate;
 import cpw.mods.fml.common.discovery.asm.ASMModParser;
 import cpw.mods.fml.common.discovery.asm.ModAnnotation;
 import cpw.mods.fml.common.modloader.ModLoaderModContainer;
@@ -16,7 +17,7 @@ public class ModContainerFactory
     public static ModContainerFactory instance() {
         return INSTANCE;
     }
-    public ModContainer build(ASMModParser modParser, File modSource)
+    public ModContainer build(ASMModParser modParser, File modSource, ModCandidate container)
     {
         String className = modParser.getASMType().getClassName();
         if (modParser.isBaseMod() && modClass.matcher(className).find())
@@ -26,7 +27,7 @@ public class ModContainerFactory
         }
 
         // We warn if it's not a basemod instance -- compatibility requires it to be in net.minecraft.src *sigh*
-        if (className.startsWith("net.minecraft.src."))
+        if (className.startsWith("net.minecraft.src.") && container.isClasspath())
         {
             FMLLog.severe("FML has detected a mod that is using a package name based on 'net.minecraft.src' : %s. This is generally a severe programming error. "
                     + " There should be no mod code in the minecraft namespace. MOVE YOUR MOD! If you're in eclipse, select your source code and 'refactor' it into "
diff --git a/fml/common/cpw/mods/fml/common/discovery/DirectoryDiscoverer.java b/fml/common/cpw/mods/fml/common/discovery/DirectoryDiscoverer.java
index a8c9dafb5..c8a8f3999 100644
--- a/fml/common/cpw/mods/fml/common/discovery/DirectoryDiscoverer.java
+++ b/fml/common/cpw/mods/fml/common/discovery/DirectoryDiscoverer.java
@@ -92,7 +92,7 @@ public class DirectoryDiscoverer implements ITypeDiscoverer
 
                 modParser.validate();
                 modParser.sendToTable(table, candidate);
-                ModContainer container = ModContainerFactory.instance().build(modParser, candidate.getModContainer());
+                ModContainer container = ModContainerFactory.instance().build(modParser, candidate.getModContainer(), candidate);
                 if (container!=null)
                 {
                     harvestedMods.add(container);
diff --git a/fml/common/cpw/mods/fml/common/discovery/JarDiscoverer.java b/fml/common/cpw/mods/fml/common/discovery/JarDiscoverer.java
index f5105553e..a8bcd7cd6 100644
--- a/fml/common/cpw/mods/fml/common/discovery/JarDiscoverer.java
+++ b/fml/common/cpw/mods/fml/common/discovery/JarDiscoverer.java
@@ -47,7 +47,7 @@ public class JarDiscoverer implements ITypeDiscoverer
                     ASMModParser modParser = new ASMModParser(jar.getInputStream(ze));
                     modParser.validate();
                     modParser.sendToTable(table, candidate);
-                    ModContainer container = ModContainerFactory.instance().build(modParser, candidate.getModContainer());
+                    ModContainer container = ModContainerFactory.instance().build(modParser, candidate.getModContainer(), candidate);
                     if (container!=null)
                     {
                         table.addContainer(container);
diff --git a/fml/common/cpw/mods/fml/common/discovery/ModCandidate.java b/fml/common/cpw/mods/fml/common/discovery/ModCandidate.java
index 407422b20..e35c44b09 100644
--- a/fml/common/cpw/mods/fml/common/discovery/ModCandidate.java
+++ b/fml/common/cpw/mods/fml/common/discovery/ModCandidate.java
@@ -43,4 +43,9 @@ public class ModCandidate
     {
         return sourceType.findMods(this, table);
     }
+
+    public boolean isClasspath()
+    {
+        return classpath;
+    }
 }
\ No newline at end of file
diff --git a/fml/common/cpw/mods/fml/common/discovery/ModDiscoverer.java b/fml/common/cpw/mods/fml/common/discovery/ModDiscoverer.java
index d6a3bcebf..4778dd90e 100644
--- a/fml/common/cpw/mods/fml/common/discovery/ModDiscoverer.java
+++ b/fml/common/cpw/mods/fml/common/discovery/ModDiscoverer.java
@@ -47,13 +47,13 @@ public class ModDiscoverer
                     else
                     {
                         FMLLog.fine("Found a minecraft related file at %s, examining for mod candidates", minecraftSources[i].getAbsolutePath());
-                        candidates.add(new ModCandidate(minecraftSources[i], minecraftSources[i], ContainerType.JAR, true));
+                        candidates.add(new ModCandidate(minecraftSources[i], minecraftSources[i], ContainerType.JAR, i!=0));
                     }
                 }
                 else if (minecraftSources[i].isDirectory())
                 {
                     FMLLog.fine("Found a minecraft related directory at %s, examining for mod candidates", minecraftSources[i].getAbsolutePath());
-                    candidates.add(new ModCandidate(minecraftSources[i], minecraftSources[i], ContainerType.DIR, true));
+                    candidates.add(new ModCandidate(minecraftSources[i], minecraftSources[i], ContainerType.DIR, i!=0));
                 }
             }
         }