Try replacing the section above with:
* )
# Unfortunately, winepath does not exit with a non-zero
# error code, so we are forced to check the contents of
# stdout. On the other hand, if the command is not
# found, the shell will set an exit code of 127 and print
# *an error message* to stdout. So we must check for both
# error code of zero AND non-empty stdout, which explains
# the odd construction:
func_to_host_path_tmp1=`winepath -w "$1" 2>/dev/null`
func_to_host_path_winepath_exitcode=$?
if test "$func_to_host_path_winepath_exitcode" -eq 0 &&\
test -n "${func_to_host_path_tmp1}" ; then
func_to_host_path_result=`echo "$func_to_host_path_tmp1"|\
$SED -e "$lt_sed_naive_backslashify"`
fi
;;
And let me know if that works better for you.