diff --git a/lib/gollum/markup.rb b/lib/gollum/markup.rb
index 7602b7fd..7b3d60b0 100644
--- a/lib/gollum/markup.rb
+++ b/lib/gollum/markup.rb
@@ -395,12 +395,12 @@ module Gollum
     # name - The String absolute or relative path of the file.
     #
     # Returns the Gollum::File or nil if none was found.
-    def find_file(name)
+    def find_file(name, version=@version)
       if name =~ /^\//
-        @wiki.file(name[1..-1], @version)
+        @wiki.file(name[1..-1], version)
       else
         path = @dir == '.' ? name : ::File.join(@dir, name)
-        @wiki.file(path, @version)
+        @wiki.file(path, version)
       end
     end
 
@@ -435,6 +435,10 @@ module Gollum
     #
     # Gitcode - fetch code from github search path and replace the contents
     #           to a code-block that gets run the next parse.
+    #           Acceptable formats:
+    #              ```language:local-file.ext```
+    #              ```language:/abs/other-file.ext```
+    #              ```language:github/gollum/master/somefile.txt```
     #
     #########################################################################
 
@@ -445,12 +449,12 @@ module Gollum
         uri = $2 || ''
         # Detect local file.
         if uri[0..6] != 'github/'
-          if uri[0..0] != '/' # relative file
-            contents = @wiki.page(uri).formatted_data
-          else # use full path
-            contents = @wiki.paged( extract_name( clean_url( uri ) ),
-             '/' + clean_url( extract_path( uri ) ) ).formatted_data
-          end
+            if file = self.find_file(uri, @wiki.ref)
+              contents = file.raw_data
+            else
+              # How do we communicate a render error?
+              next "File not found: #{Rack::Utils::escape_html(uri)}"
+            end
         else
           contents = Gollum::Gitcode.new(uri).contents
         end
diff --git a/test/test_gitcode.rb b/test/test_gitcode.rb
index 807e3c02..0c52e401 100644
--- a/test/test_gitcode.rb
+++ b/test/test_gitcode.rb
@@ -34,6 +34,66 @@ context "gitcode" do
     assert_equal g.contents, %{<ol class=\"tree\">\n  <li class=\"file\">\n    <a href=\"0\"><span class=\"icon\"></span>0</a>\n  </li>\n</ol>\n}
   end
 
+  test "gitcode relative local file" do
+    @wiki.write_page("Bilbo Baggins", :markdown, "a\n```python:file-exists.py```\nb", commit_details)
+    page = @wiki.page('Bilbo Baggins')
+
+    index = @wiki.repo.index
+    index.add("file-exists.py", "import sys\n\nprint sys.maxint\n")
+    index.commit("Add file-exists.py")
+
+    @wiki.clear_cache
+
+    output = page.formatted_data
+    assert_equal %Q{<p>a\n</p><div class="highlight"><pre><span class="kn">import</span> <span class="nn">sys</span>\n\n<span class="k">print</span> <span class="n">sys</span><span class="o">.</span><span class="n">maxint</span>\n</pre></div>\n\n<p>b</p>}, output
+  end
+
+  test "gitcode relative local file in subdir" do
+    index = @wiki.repo.index
+    index.add("foo/file-exists.py", "import sys\n\nprint sys.maxint\n")
+    index.commit("Add file-exists.py")
+
+    @wiki.write_page("Pippin", :markdown, "a\n```python:file-exists.py```\nb", commit_details, 'foo')
+
+    page = @wiki.paged('Pippin', 'foo')
+    output = page.formatted_data
+    assert_equal %Q{<p>a\n</p><div class="highlight"><pre><span class="kn">import</span> <span class="nn">sys</span>\n\n<span class="k">print</span> <span class="n">sys</span><span class="o">.</span><span class="n">maxint</span>\n</pre></div>\n\n<p>b</p>}, output
+  end
+
+  test "gitcode relative no file" do
+    @wiki.write_page("Bilbo Baggins", :markdown, "a\n```python:no-file-exists.py```\nb", commit_details)
+    page = @wiki.page('Bilbo Baggins')
+    output = page.formatted_data
+    assert_equal %Q{<p>a\nFile not found: no-file-exists.py\nb</p>}, output
+  end
+
+  test "gitcode absolute local file" do
+    @wiki.write_page("Bilbo Baggins", :markdown, "a\n```python:/monkey/file-exists.py```\nb", commit_details)
+    page = @wiki.page('Bilbo Baggins')
+
+    index = @wiki.repo.index
+    index.add("monkey/file-exists.py", "import sys\n\nprint sys.platform\n")
+    index.commit("Add monkey/file-exists.py")
+    @wiki.clear_cache
+
+    output = page.formatted_data
+    assert_equal %Q{<p>a\n</p><div class="highlight"><pre><span class="kn">import</span> <span class="nn">sys</span>\n\n<span class="k">print</span> <span class="n">sys</span><span class="o">.</span><span class="n">platform</span>\n</pre></div>\n\n<p>b</p>}, output
+  end
+
+  test "gitcode absolute no file" do
+    @wiki.write_page("Bilbo Baggins", :markdown, "a\n```python:/monkey/no-file-exists.py```\nb", commit_details)
+    page = @wiki.page('Bilbo Baggins')
+    output = page.formatted_data
+    assert_equal %Q{<p>a\nFile not found: /monkey/no-file-exists.py\nb</p>}, output
+  end
+
+  test "gitcode error generates santized html" do
+    @wiki.write_page("Bilbo Baggins", :markdown, "a\n```python:<script>foo</script>```\nb", commit_details)
+    page = @wiki.page('Bilbo Baggins')
+    output = page.formatted_data
+    assert_equal %Q{<p>a\nFile not found: &lt;script&gt;foo&lt;/script&gt;\nb</p>}, output
+  end
+
   teardown do
     @cleanup.call
   end
diff --git a/test/test_markup.rb b/test/test_markup.rb
index 7e0b4d6b..a8a10e18 100644
--- a/test/test_markup.rb
+++ b/test/test_markup.rb
@@ -582,24 +582,13 @@ np.array([[2,2],[1,3]],np.float)
     assert_match /\(\[\[/, rendered, "#{markup_class} parses out wiki links\n#{rendered}"
   end
 
-  test "embed code is escaped" do
-    @wiki.write_page("script", :markdown, "a <script></script> b", commit_details)
-    @wiki.write_page("page", :markdown, "```html:script```", commit_details)
-
-    output_script = @wiki.page("script").formatted_data
-    output_page = @wiki.page("page").formatted_data
-
-    assert_equal %Q{<p>a  b</p>}, output_script
-    assert_equal %Q{<div class=\"highlight\"><pre><span class=\"nt\">&lt;p&gt;</span>a  b<span class=\"nt\">&lt;/p&gt;</span>\n</pre></div>}, output_page
-  end
-
   test "embed code page absolute link" do
     @wiki.write_page("base", :markdown, "a\n!base\b", commit_details)
     @wiki.write_page("a", :markdown, "a\n```html:/base```\b", commit_details)
 
     page = @wiki.page("a")
     output = page.formatted_data
-    assert_equal %Q{<p>a\n</p><div class=\"highlight\"><pre><span class=\"nt\">&lt;p&gt;</span>a\n!base<span class=\"nt\">&lt;/p&gt;</span>\n</pre></div>\n}, output
+    assert_equal %Q{<p>a\nFile not found: /base</p>}, output
   end
 
   test "embed code page relative link" do
@@ -608,7 +597,7 @@ np.array([[2,2],[1,3]],np.float)
 
     page = @wiki.page("a")
     output = page.formatted_data
-    assert_equal %Q{<p>a\n</p><div class=\"highlight\"><pre><span class=\"nt\">&lt;p&gt;</span>a\n!rel<span class=\"nt\">&lt;/p&gt;</span>\n</pre></div>\n}, output
+    assert_equal %Q{<p>a\nFile not found: base</p>}, output
   end
 
   test "code block in unsupported language" do
diff --git a/test/wiki_factory.rb b/test/wiki_factory.rb
index 0fd7df4f..a6c81174 100644
--- a/test/wiki_factory.rb
+++ b/test/wiki_factory.rb
@@ -1,8 +1,8 @@
 class WikiFactory
-  def self.create p
+  def self.create p, opt={}
     path = testpath "examples/test.git"
     Grit::Repo.init_bare(path)
-    Gollum::Wiki.default_options = {:universal_toc => false}
+    Gollum::Wiki.default_options = {:universal_toc => false}.merge(opt)
     cleanup = Proc.new { FileUtils.rm_r File.join(File.dirname(__FILE__), *%w[examples test.git]) }
     wiki = Gollum::Wiki.new(path)
     # set 'wiki-' prefix on ids for tests