Thanks, Gary!  That may be it - the problem does not exist with CVS
automake at 1.4e  with a top of ChangeLog:

2001-03-12  Pavel Roskin  <[EMAIL PROTECTED]>

        * tests/Makefile.am (XFAIL_TESTS): Remove cond3.test, it passes
        now.

2001-03-12  Akim Demaille  <[EMAIL PROTECTED]>

        * automake.in (&variable_conditions_permutations): Separate the
        conditions.
...

Harlan

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