from ExtUtils/Packlist.pm:207

sub get_dir_list {
        my ($him,@files) = @_;

        my %alldirs;

        for my $file (@files) {
                $file =~ s|/[^/]+$||;
                while (-d $file) {
                        $file =~ s|/([^/]+)$||;
                        my $last = $1;
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This loop hangs with $file eq '..' and $last eq 'dummy-install'. This code doesn't check was the regexp substitution successful, and if not, uses $1 from the last time. Change this line to:

 $file =~ s|/([^/]+)$|| or last;
[download]

and t/INSTALL_BASE.t will pass the test in a couple of seconds.