Yep seems to work with image and audio resources but not code modules.

Likewise Corona emulator is not case sensitive with module names but build applications are.

I know of no way to subdir module files. I just suck it up and give them categorised prefix names eg:

gfx_anim.lua
gfx_load.lua
gfx_lib.lua
screen_state.lua
screen_init.lua
etc.

Thanks for the answer, yeah I already thought that it is a bug. I guess I'll use your solution till they fix it, if they fix it.

Cheers!