This is a bug with the current version of blender. There's a chance it might be fixed int he current CVS, but I don't think it is yet.
I filed a patch against this months ago and it was finally responded to a week or two ago.
The bug report is here: http://projects.blender.org/tracker/?func=detail&atid=125&aid=2817&group_id=9
The patch is in the bug report and the file attatched it. If you're not building from source, there's really now way around it other than going back to earlier versions (I'm not sure how far back you need to go) of blender or waiting for a new release candidate build once my patch or a similar change is appplied to the official CVS.
The patch is encountered when you have more than a certain small number of directories and/or sub-directories in your blender scripts directory.