diff --git a/public/basehandle.h b/public/basehandle.h
index 492a20b3..f0dfa831 100644
--- a/public/basehandle.h
+++ b/public/basehandle.h
@@ -1,4 +1,4 @@
-//========= Copyright © 1996-2005, Valve Corporation, All rights reserved. ============//
+//========= Copyright © 1996-2005, Valve Corporation, All rights reserved. ============//
 //
 // Purpose: 
 //
@@ -92,10 +92,10 @@ inline CBaseHandle::CBaseHandle( int iEntry, int iSerialNumber )
 
 inline void CBaseHandle::Init( int iEntry, int iSerialNumber )
 {
-	Assert( iEntry >= 0 && iEntry < NUM_ENT_ENTRIES );
+	Assert( iEntry >= 0 && (iEntry & ENT_ENTRY_MASK) == iEntry);
 	Assert( iSerialNumber >= 0 && iSerialNumber < (1 << NUM_SERIAL_NUM_BITS) );
 
-	m_Index = iEntry | (iSerialNumber << NUM_ENT_ENTRY_BITS);
+	m_Index = iEntry | (iSerialNumber << NUM_SERIAL_NUM_SHIFT_BITS);
 }
 
 inline void CBaseHandle::Term()
@@ -110,12 +110,26 @@ inline bool CBaseHandle::IsValid() const
 
 inline int CBaseHandle::GetEntryIndex() const
 {
+	// There is a hack here: due to a bug in the original implementation of the 
+	// entity handle system, an attempt to look up an invalid entity index in 
+	// certain cirumstances might fall through to the the mask operation below.
+	// This would mask an invalid index to be in fact a lookup of entity number
+	// NUM_ENT_ENTRIES, so invalid ent indexes end up actually looking up the
+	// last slot in the entities array. Since this slot is always empty, the 
+	// lookup returns NULL and the expected behavior occurs through this unexpected
+	// route.
+	// A lot of code actually depends on this behavior, and the bug was only exposed
+	// after a change to NUM_SERIAL_NUM_BITS increased the number of allowable
+	// static props in the world. So the if-stanza below detects this case and 
+	// retains the prior (bug-submarining) behavior.
+	if ( !IsValid() )
+		return NUM_ENT_ENTRIES-1;
 	return m_Index & ENT_ENTRY_MASK;
 }
 
 inline int CBaseHandle::GetSerialNumber() const
 {
-	return m_Index >> NUM_ENT_ENTRY_BITS;
+	return m_Index >> NUM_SERIAL_NUM_SHIFT_BITS;
 }
 
 inline int CBaseHandle::ToInt() const
diff --git a/public/const.h b/public/const.h
index fc1d2191..3a22a20d 100644
--- a/public/const.h
+++ b/public/const.h
@@ -1,4 +1,4 @@
-//========= Copyright © 1996-2005, Valve Corporation, All rights reserved. ============//
+//========= Copyright © 1996-2005, Valve Corporation, All rights reserved. ============//
 //
 // Purpose: 
 //
@@ -69,7 +69,7 @@
 #define INVALID_EHANDLE_INDEX	0xFFFFFFFF
 
 #define NUM_SERIAL_NUM_BITS		(32 - NUM_ENT_ENTRY_BITS)
-
+#define NUM_SERIAL_NUM_SHIFT_BITS       16
 
 // Networked ehandles use less bits to encode the serial number.
 #define NUM_NETWORKED_EHANDLE_SERIAL_NUMBER_BITS	10