git checkout -f: What am I missing?

Hi,

I have a situation with git that I'm trying to understand:

Description:
1) GIT_DIR is set to /path/to/repo/.git
2) Repository is /not /a bare repo, and all files are nicely checked-out 
in /path/to/repo/
3) Somebody pushes to that repo using ssh (any branch, checked-out or not)
4) Default post-receive hook runs (it is the only one +x) which sends 
out an email 
(http://repo.or.cz/w/git.git/blob/HEAD:/contrib/hooks/post-receive-email)
5) After it is done sending the email, I put "git checkout -f", at the 
end in the same file, in case someone pushes to a checked-out branch

Problem: It runs "checkout -f" as if inside .git directory, instead of on the parent. i.e. it gets all files from the parent and writes them inside .git. Parent is left untouched.

Some more info:
0) We don't have GIT_DIR set in the environment. The hook does a 
rev-parse to find it.
1) echo of $GIT_DIR right before the checkout -f line gives a "." .
2) It works as expected if I do this:  cd /path/to/repo && git 
--git-dir=/path/to/repo/.git/ checkout -f

What I do know:
1) Pushing to a checked-out branch is not a git best-practice, and some 
git behavior is undefined in that case. We already have plans to go away 
from that.
2) Git tends to like full path names instead of relative ones

Can someone help me understand this behavior?

Thanks. -Soham