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Assume the following simple latex with some .eps file testeps.eps in the: same directory, the parent directory, and a subdirectory called testsub.

    \psfragfig*[width=15cm]{testeps} {}
    \psfragfig*[width=15cm]{testsub/testeps} {}
    \psfragfig*[width=15cm]{../testeps} {}

The first two work fine, the last says:

"I can't write on file `../testeps-pstool.tex'}
"Emergency stop }
No file "../testeps.tex" or "../testeps-psfrag"

I am using miktex on Windows with something like the following for my PdfLaTex (in TeXstudio, but I don't think that matters).

pdflatex.exe" -shell-escape -synctex=1 --aux-directory=C:\Windows\Temp  -interaction=nonstopmode %.tex

I have tried every permutation of -shell-escape and write18 I could find. Of course, I used to use \graphicspath before I converted to psfragfig, but it isn't compatible?

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