Whoa, an interesting bug.  I'm forwarding this to the Cygwin mailing list for reference.  I might take a deeper look over the weekend if no-one beats me to it.

It seems like running batch files (.bat, .cmd) inside a directory with an at sign and a space (such as '@ x' or 'x @') fails.

/w/temp/@ x$ ./hello.bat
'W:\temp\@' is not recognized as an internal or external command,
operable program or batch file.

-- 
David Macek