diff --git a/server/resources/compiler/linux/nwn_script_comp b/server/resources/compiler/linux/nwn_script_comp
index 5a188d8..0c984d7 100755
Binary files a/server/resources/compiler/linux/nwn_script_comp and b/server/resources/compiler/linux/nwn_script_comp differ
diff --git a/server/resources/compiler/mac/nwn_script_comp b/server/resources/compiler/mac/nwn_script_comp
index 88791f0..0c984d7 100644
Binary files a/server/resources/compiler/mac/nwn_script_comp and b/server/resources/compiler/mac/nwn_script_comp differ
diff --git a/server/resources/compiler/windows/nwn_script_comp.exe b/server/resources/compiler/windows/nwn_script_comp.exe
index c76bdc0..acd87a2 100644
Binary files a/server/resources/compiler/windows/nwn_script_comp.exe and b/server/resources/compiler/windows/nwn_script_comp.exe differ
diff --git a/server/src/Providers/DiagnosticsProvider.ts b/server/src/Providers/DiagnosticsProvider.ts
index 2246163..7449e89 100644
--- a/server/src/Providers/DiagnosticsProvider.ts
+++ b/server/src/Providers/DiagnosticsProvider.ts
@@ -25,20 +25,27 @@ export default class DiagnoticsProvider extends Provider {
 
   private generateDiagnostics(uris: string[], files: FilesDiagnostics, severity: DiagnosticSeverity) {
     return (line: string) => {
-      const uri = uris.find((uri) => basename(fileURLToPath(uri)) === lineFilename.exec(line)![2]);
-
-      if (uri) {
-        const linePosition = Number(lineNumber.exec(line)![1]) - 1;
-        const diagnostic = {
-          severity,
-          range: {
-            start: { line: linePosition, character: 0 },
-            end: { line: linePosition, character: Number.MAX_VALUE },
-          },
-          message: lineMessage.exec(line)![2].trim(),
-        };
-
-        files[uri].push(diagnostic);
+      const lineFilenameMatch = lineFilename.exec(line);
+      if (lineFilenameMatch) {
+        const reportedFileName = lineFilenameMatch[2];
+        const uri = uris.find((uri) => basename(fileURLToPath(uri)) === reportedFileName);
+        if (uri) {
+          const lineNumberMatch = lineNumber.exec(line);
+          const lineMessageMatch = lineMessage.exec(line);
+          if (lineNumberMatch && lineMessageMatch) {
+            const linePosition = Number(lineNumberMatch[1]) - 1;
+            const diagnostic = {
+              severity,
+              range: {
+                start: { line: linePosition, character: 0 },
+                end: { line: linePosition, character: Number.MAX_VALUE },
+              },
+              message: lineMessageMatch[2].trim(),
+            };
+
+            files[uri].push(diagnostic);
+          }
+        }
       }
     };
   }
@@ -101,7 +108,10 @@ export default class DiagnoticsProvider extends Provider {
       // The compiler command:
       //  - y; continue on error
       //  - s; dry run
-      const args = ["-y", "-s"];
+      //  - n; no entry point required (for include files)
+      //  - E; collect and report all errors (not just the first)
+      // Note: -E requires compiler binary with ABI v2+
+      const args = ["-y", "-s", "-n", "-E"];
       if (Boolean(nwnHome)) {
         args.push("--userdirectory");
         args.push(`"${nwnHome}"`);
@@ -114,12 +124,25 @@ export default class DiagnoticsProvider extends Provider {
       } else if (verbose) {
         this.server.logger.info("Trying to resolve Neverwinter Nights installation directory automatically.");
       }
-      if (children.length > 0) {
+      // Collect directories from ALL indexed documents so the compiler can
+      // resolve the full transitive include chain, not just direct children.
+      const allDirs: Set<string> = new Set();
+      this.server.documentsCollection.forEach((doc) => {
+        if (doc.uri && doc.uri.startsWith("file://")) {
+          allDirs.add(dirname(fileURLToPath(doc.uri)));
+        }
+      });
+      // Also add the compiled file's own directory
+      allDirs.add(dirname(fileURLToPath(uri)));
+      if (allDirs.size > 0) {
         args.push("--dirs");
-        args.push(`"${[...new Set(uris.map((uri) => dirname(fileURLToPath(uri))))].join(",")}"`);
+        args.push(`"${[...allDirs].join(",")}"`);
       }
+
+      const filePath = fileURLToPath(uri);
+      this.server.logger.info(`Compiling file: ${filePath}`);
       args.push("-c");
-      args.push(`"${fileURLToPath(uri)}"`);
+      args.push(`"${filePath}"`);
 
       let stdout = "";
       let stderr = "";
@@ -186,6 +209,7 @@ export default class DiagnoticsProvider extends Provider {
         for (const [uri, diagnostics] of Object.entries(files)) {
           this.server.connection.sendDiagnostics({ uri, diagnostics });
         }
+
         resolve(true);
       });
     });