On cursory inspection, I agree that this is precisely what the "if win32" block in `virtualenv_embedded/distutils-init.py` is intended to fix, and it seems to me the correct fix is likely to just make the equivalent fix directly in distutils: change the library_dirs-building code in `distutils.command.build_ext:finalize_options` (under the "if os.name == 'nt'" block) to build the path relative to `sys.base_exec_prefix` rather than `sys.exec_prefix`.