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Thanks for the report jwoods!
What OS / compiler are you working with? Can you post or PM your config.log?
Mea culpa on this one. I had undefined HAVE_SETENV to force that code path in earlier development, but obviously not when/after adding in the error checking. I'll fix this and look at forcing the tests to use the !defined(HAVE_SETENV) path as well.
Have you come across any other problems compiling/installing?