test_isolation_outdir must be considered an opaque string, it could be an url.

build/isolate.gypi

 # Copyright (c) 2012 The Chromium Authors. All rights reserved.
 # Use of this source code is governed by a BSD-style license that can be
 # found in the LICENSE file.
 
 # This file is meant to be included into a target to provide a rule
 # to "build" .isolate files into a .isolated file.
 #
 # To use this, create a gyp target with the following form:
 # 'conditions': [
 #   ['test_isolation_mode != "noop"', {
@@ skipping 51 matching lines @@
         '--outdir', '<(test_isolation_outdir)',
         '--variable', 'PRODUCT_DIR', '<(PRODUCT_DIR)',
         '--variable', 'OS', '<(OS)',
         '--variable', 'chromeos', '<(chromeos)',
         '--result', '<@(_outputs)',
         '--isolate', '<(RULE_INPUT_PATH)',
       ],
       'conditions': [
         ["test_isolation_outdir!=''", {
           'action': [
-            '--outdir', '<(PRODUCT_DIR)/<(test_isolation_outdir)',
+            '--outdir', '<(test_isolation_outdir)',

[csharp, 2013/03/13 19:16:58]

Add back and change if to be == instead of !=

           ],
         }],
         ['test_isolation_fail_on_missing == 0', {
             'action': ['--ignore_broken_items']
           },
         ],
       ],
       'msvs_cygwin_shell': 0,
     },
   ],
 }