if (ignore_case) {
                        struct cache_entry *ce;
                        ce = cache_file_exists(path, strlen(path), ignore_case);
-                       if (ce && ce_stage(ce) == 0)
+                       if (ce && ce_stage(ce) == 0 && strcmp(path, ce->name))
                                return 0;
                }
                if (remove_path(path))
                        oid = b_oid;
                        conf = _("directory/file");
                }
-               if (dir_in_way(path, !o->call_depth,
-                              S_ISGITLINK(a_mode))) {
+               if (dir_in_way(path,
+                              !o->call_depth && !S_ISGITLINK(a_mode),
+                              0)) {
                        char *new_path = unique_path(o, path, add_branch);
                        clean_merge = 0;
                        output(o, 1, _("CONFLICT (%s): There is a directory with name %s in %s. "
                /* if there is no common ancestor, use an empty tree */
                struct tree *tree;
 
-               tree = lookup_tree(&empty_tree_oid);
+               tree = lookup_tree(the_hash_algo->empty_tree);
                merged_common_ancestors = make_virtual_commit(tree, "ancestor");
        }
 
                DIFF_XDL_SET(o, IGNORE_WHITESPACE);
        else if (!strcmp(s, "ignore-space-at-eol"))
                DIFF_XDL_SET(o, IGNORE_WHITESPACE_AT_EOL);
+       else if (!strcmp(s, "ignore-cr-at-eol"))
+               DIFF_XDL_SET(o, IGNORE_CR_AT_EOL);
        else if (!strcmp(s, "renormalize"))
                o->renormalize = 1;
        else if (!strcmp(s, "no-renormalize"))