Today I ran into the same problem. I had a MVC handler within the folder
(app root)/mvc(/controller.php)
and wanted to go one folder up and then into the data folder to open an xml. My path was: "../data/foo.xml". It didn' work.
But then it came to me: Since I include the mvc/controller.php from the index.php in the app root, the controller "doesn't know" that it is located as an include in the root folder. And from there it simply has to be "data/foo.xml".
I'm not sure if this is your solution or if this is what you meant with "I was checking from 2 diff. locations", but I believe strongly, that for some devs who look up the problem's effect it could be the pebble to the solution.