in reply to What's #! got to do with it?

Since you use a Unix path in your example, I'll assume all the people referrring to Windows are on the wrong path.

Try your experiment again, but begin with the shell command appropriate to your shell:

PATH=/usr/bin:/usr/local/bin # bash, etc setenv PATH "/bin:/usr/bin:/usr/local/bin" # csh, etc

and see what happens.