--- a/mercurial/cmdutil.py	Tue Dec 02 05:12:59 2014 +0100
+++ b/mercurial/cmdutil.py	Wed Dec 03 14:33:29 2014 -0800
@@ -1984,7 +1984,7 @@
         cca = scmutil.casecollisionauditor(ui, abort, repo.dirstate)
     for f in wctx.walk(match):
         exact = match.exact(f)
-        if exact or not explicitonly and f not in wctx and repo.wvfs.exists(f):
+        if exact or not explicitonly and f not in wctx and repo.wvfs.lexists(f):
             if cca:
                 cca(f)
             names.append(f)

--- a/tests/test-symlinks.t	Tue Dec 02 05:12:59 2014 +0100
+++ b/tests/test-symlinks.t	Wed Dec 03 14:33:29 2014 -0800
@@ -3,12 +3,18 @@
 == tests added in 0.7 ==
 
   $ hg init test-symlinks-0.7; cd test-symlinks-0.7;
-  $ touch foo; ln -s foo bar;
+  $ touch foo; ln -s foo bar; ln -s nonexistent baz
+
+import with add and addremove -- symlink walking should _not_ screwup.
 
-import with addremove -- symlink walking should _not_ screwup.
-
+  $ hg add
+  adding bar
+  adding baz
+  adding foo
+  $ hg forget bar baz foo
   $ hg addremove
   adding bar
+  adding baz
   adding foo
 
 commit -- the symlink should _not_ appear added to dir state