diff --git a/pkgs/remapSourcePathPrefixHook.sh b/pkgs/remapSourcePathPrefixHook.sh
index 98eb677..82576d5 100644
--- a/pkgs/remapSourcePathPrefixHook.sh
+++ b/pkgs/remapSourcePathPrefixHook.sh
@@ -1,9 +1,11 @@
 remapPathPrefix() {
-  if [ -z "${cargoVendorDir-}" ]; then
-    return
-  fi
-
-  local remapArgs="--remap-path-prefix ${cargoVendorDir}=/sources"
+  # We unfortunately cannot get away with *just* stripping a `/nix/store` prefix
+  # since nix will still find references to the `<sha>-dirname` floating around
+  # and decide that the binaries must depend on the source files themselves.
+  # To get around this we actually have to strip the entire prefix of the vendored
+  # directory (or provided input).
+  local prefixToRemap=${1:?prefixToRemap not specified}
+  local remapArgs="--remap-path-prefix ${prefixToRemap}=/sources"
 
   if [ -n "${RUSTFLAGS}" ]; then
     export RUSTFLAGS="${RUSTFLAGS} ${remapArgs}"
@@ -18,6 +20,12 @@ remapPathPrefix() {
   fi
 }
 
+remapPathPrefixToVendoredDir() {
+  if [ -n "${cargoVendorDir-}" ]; then
+    remapPathPrefix "${cargoVendorDir}"
+  fi
+}
+
 if [ "1" = "${doRemapSourcePathPrefix-}" ]; then
-  postConfigureHooks+=(remapPathPrefix)
+  postConfigureHooks+=(remapPathPrefixToVendoredDir)
 fi
diff --git a/tests/default.nix b/tests/default.nix
index a63afad..a3b76b2 100644
--- a/tests/default.nix
+++ b/tests/default.nix
@@ -17,7 +17,6 @@ pkgs.lib.makeScope myLib.newScope (self:
 
     compilesFresh = callPackage ./compilesFresh.nix { };
     compilesFreshSimple = self.compilesFresh ./simple "simple";
-
     compilesFreshOverlappingTargets = self.compilesFresh
       ./overlapping-targets
       (builtins.concatStringsSep "\n" [
@@ -29,12 +28,11 @@ pkgs.lib.makeScope myLib.newScope (self:
 
     customCargoTargetDirectory =
       let
-        simple = myLib.buildWithCargo {
+        simple = self.simple.overrideAttrs (old: {
           name = "customCargoTargetDirectory";
           doCopyTargetToOutput = false;
-          src = ./simple;
           CARGO_TARGET_DIR = "some/nested/custom-cargo-dir";
-        };
+        });
       in
       pkgs.runCommand "smoke-simple" { } ''
         # does it run?
@@ -42,18 +40,16 @@ pkgs.lib.makeScope myLib.newScope (self:
         touch $out
       '';
 
-    smokeSimple =
-      let
-        simple = myLib.buildWithCargo {
-          doCopyTargetToOutput = false;
-          src = ./simple;
-        };
-      in
-      pkgs.runCommand "smoke-simple" { } ''
-        # does it run?
-        ${simple}/bin/simple
-        touch $out
-      '';
+    simple = myLib.buildWithCargo {
+      doCopyTargetToOutput = false;
+      src = ./simple;
+    };
+
+    smokeSimple = pkgs.runCommand "smoke-simple" { } ''
+      # does it run?
+      ${self.simple}/bin/simple
+      touch $out
+    '';
 
     smokeOverlappingTargets =
       let