diff --git a/Core/GameEngineDevice/Source/W3DDevice/GameClient/BaseHeightMap.cpp b/Core/GameEngineDevice/Source/W3DDevice/GameClient/BaseHeightMap.cpp
index 95f41b57f24..3477ce05ba1 100644
--- a/Core/GameEngineDevice/Source/W3DDevice/GameClient/BaseHeightMap.cpp
+++ b/Core/GameEngineDevice/Source/W3DDevice/GameClient/BaseHeightMap.cpp
@@ -656,10 +656,6 @@ void BaseHeightMapRenderObjClass::reset()
 	}
 }
 
-/**@todo: Ray intersection needs to be optimized with some sort of grid-tracing
-(ala line drawing).  We should also try making the search in a front->back order
-relative to the ray so we can early exit as soon as we have a hit.
-*
 //=============================================================================
 // BaseHeightMapRenderObjClass::Cast_Ray
 //=============================================================================
@@ -671,18 +667,27 @@ map plane so this is very quick (small bounding box).  But it can become slow
 for arbitrary rays such as those used in AI visibility checks(2 units on
 opposite corners of the map would check every polygon in the map).
 */
+/** @todo: Ray intersection needs to be optimized with some sort of grid-tracing
+(ala line drawing).  We should also try making the search in a front->back order
+relative to the ray so we can early exit as soon as we have a hit.
+*/
+// TheSuperHackers @fix The ray cast can now correctly collide with the initial
+// hit box even if the ray starts inside of it and no longer falls back to an
+// infinitely large search region if the initial box cannot be collided with.
 //=============================================================================
 bool BaseHeightMapRenderObjClass::Cast_Ray(RayCollisionTestClass & raytest)
 {
+	if (!m_map)
+		return false;	//need valid pointer to heightmap samples
+
 	TriClass tri;
 	Bool hit = false;
 	Int X,Y;
 	Vector3 normal,P0,P1,P2,P3;
-	Bool hasP0 = false;
-	Bool hasP1 = false;
-
-	if (!m_map)
-		return false;	//need valid pointer to heightmap samples
+	P0.Set(FLT_MAX, FLT_MAX, FLT_MAX); // Set initial bogus value
+	P1.Set(FLT_MAX, FLT_MAX, FLT_MAX); // Set initial bogus value
+	Int P0HitCount = 0;
+	Int P1HitCount = 0;
 
 	//Clip ray to extents of height map
 	AABoxClass hbox;
@@ -694,16 +699,19 @@ bool BaseHeightMapRenderObjClass::Cast_Ray(RayCollisionTestClass & raytest)
 	Int endCellY = 0;
 	const Int borderSize = m_map->getBorderSizeInline();
 	const Int overhang = 2*VERTEX_BUFFER_TILE_LENGTH + borderSize; // Allow picking past the edge for scrolling & objects.
- 	Vector3 minPt(MAP_XY_FACTOR*(-overhang), MAP_XY_FACTOR*(-overhang), -MAP_XY_FACTOR);
-	Vector3 maxPt(MAP_XY_FACTOR*(m_map->getXExtent()+overhang),
-		MAP_XY_FACTOR*(m_map->getYExtent()+overhang), MAP_HEIGHT_SCALE*m_map->getMaxHeightValue()+MAP_XY_FACTOR);
-	MinMaxAABoxClass mmbox(minPt, maxPt);
+
+	// The first hit box is very rough and is only meant to narrow the search.
+	const Real mapMinHeight = MAP_HEIGHT_SCALE * m_map->getMinHeightValue();
+	const Real mapMaxHeight = MAP_HEIGHT_SCALE * m_map->getMaxHeightValue();
+	const Vector3 minPt(MAP_XY_FACTOR*(-overhang), MAP_XY_FACTOR*(-overhang), mapMinHeight);
+	const Vector3 maxPt(MAP_XY_FACTOR*(m_map->getXExtent()+overhang), MAP_XY_FACTOR*(m_map->getYExtent()+overhang), mapMaxHeight);
+	const MinMaxAABoxClass mmbox(minPt, maxPt);
 	hbox.Init(mmbox);
 
 	lineseg=raytest.Ray;
 
-	Int p;
-	for (p=0; p<3; p++) {
+	Int terrainIntersectionIteration = 0;
+	for (; ; ++terrainIntersectionIteration) {
 		//find intersection point of ray and terrain bounding box
 		result.Reset();
 		result.ComputeContactPoint=true;
@@ -712,12 +720,12 @@ bool BaseHeightMapRenderObjClass::Cast_Ray(RayCollisionTestClass & raytest)
 
 		if (CollisionMath::Collide(lineseg,hbox,&result))
 		{
-			//ray intersects terrain or starts inside the terrain.
-			if (!result.StartBad)	//check if start point inside terrain
+			// Go ahead if point is not starting inside terrain or it is the first rough box collision.
+			if (!result.StartBad || terrainIntersectionIteration == 0)
 			{
 				newP0 = P0 != result.ContactPoint;
-				hasP0 = true;
 				P0 = result.ContactPoint;	//make intersection point the new start of the ray.
+				++P0HitCount;
 			}
 
 			//reverse direction of original ray and clip again to extent of heightmap
@@ -726,16 +734,22 @@ bool BaseHeightMapRenderObjClass::Cast_Ray(RayCollisionTestClass & raytest)
 			lineseg2.Set(lineseg.Get_P1(),lineseg.Get_P0());	//reverse line segment
 			if (CollisionMath::Collide(lineseg2,hbox,&result))
 			{
-				if (!result.StartBad)	//check if end point inside terrain
+				// Go ahead if point is not starting inside terrain or it is the first rough box collision.
+				if (!result.StartBad || terrainIntersectionIteration == 0)
 				{
 					newP1 = P1 != result.ContactPoint;
-					hasP1 = true;
 					P1 = result.ContactPoint;	//make intersection point the new end point of ray
+					++P1HitCount;
 				}
 			}
 		}
 
-		if (!newP0 || !newP1)
+		// Has not even hit the first hit box?
+		if (P0HitCount == 0 || P1HitCount == 0)
+			return false;
+
+		// Has no new hit points?
+		if (!newP0 && !newP1)
 			break;
 
 		// Take the 2D bounding box of ray and check heights
@@ -755,6 +769,10 @@ bool BaseHeightMapRenderObjClass::Cast_Ray(RayCollisionTestClass & raytest)
 			endCellY = REAL_TO_INT_CEIL(P1.Y/MAP_XY_FACTOR);
 		}
 
+		// Stop narrowing after the third iteration
+		if (terrainIntersectionIteration == 2)
+			break;
+
 		Int i, j, minHt, maxHt;
 
 		minHt = m_map->getMaxHeightValue();
@@ -773,7 +791,8 @@ bool BaseHeightMapRenderObjClass::Cast_Ray(RayCollisionTestClass & raytest)
 		hbox.Init(mmbox);
 	}
 
-	if (!hasP0 || !hasP1)
+	// Needs at least 2 hit counts for a proper terrain collision.
+	if (P0HitCount < 2 || P1HitCount < 2)
 		return false;
 
 	raytest.Result->ComputeContactPoint=true;	//tell CollisionMath that we need point.
@@ -788,7 +807,6 @@ bool BaseHeightMapRenderObjClass::Cast_Ray(RayCollisionTestClass & raytest)
 	Int offset;
 	for (offset = 1; offset < 5; offset *= 3) {
 		for (Y=startCellY-offset; Y<=endCellY+offset; Y++) {
-
 			for (X=startCellX-offset; X<=endCellX+offset; X++) {
 				//test the 2 triangles in this cell
 				//	3-----2
diff --git a/Core/Libraries/Source/WWVegas/WWMath/castres.h b/Core/Libraries/Source/WWVegas/WWMath/castres.h
index 7b8330cf9a3..123611cfcf8 100644
--- a/Core/Libraries/Source/WWVegas/WWMath/castres.h
+++ b/Core/Libraries/Source/WWVegas/WWMath/castres.h
@@ -56,7 +56,7 @@ struct CastResultStruct
 	CastResultStruct()	{ Reset(); }
 	void		Reset()		{ StartBad = false; Fraction = 1.0f; Normal.Set(0,0,0); SurfaceType = 0; ComputeContactPoint = false; ContactPoint.Set(0,0,0); }
 
-	bool		StartBad;		// was the initial configuration interpenetrating something?
+	bool		StartBad;		// was the initial configuration interpenetrating something? true if ray starts inside the collided geometry
 	float		Fraction;		// fraction of the move up until collision
 	Vector3	Normal;			// surface normal at the collision point
 	uint32	SurfaceType;	// surface type of polygon at collision point (see W3D_SURFACE_TYPES in w3d_file.h)
diff --git a/Core/Libraries/Source/WWVegas/WWMath/colmathline.cpp b/Core/Libraries/Source/WWVegas/WWMath/colmathline.cpp
index c55036b636d..75e110bd84c 100644
--- a/Core/Libraries/Source/WWVegas/WWMath/colmathline.cpp
+++ b/Core/Libraries/Source/WWVegas/WWMath/colmathline.cpp
@@ -293,6 +293,10 @@ bool CollisionMath::Collide(const LineSegClass & line,const AABoxClass & box,Cas
 	// if ray starts inside the box, note that fact and bail.
 	if (test.Inside) {
 		res->StartBad = true;
+		// TheSuperHackers @tweak The contact point will be where the line has started.
+		if (res->ComputeContactPoint) {
+			res->ContactPoint = line.Get_P0();
+		}
 		return true;
 	}
 
@@ -328,6 +332,10 @@ bool CollisionMath::Collide(const LineSegClass & line,const OBBoxClass & box,Cas
 	// if ray starts inside the box, don't collide
 	if (test.Inside) {
 		result->StartBad = true;
+		// TheSuperHackers @tweak The contact point will be where the line has started.
+		if (result->ComputeContactPoint) {
+			result->ContactPoint = line.Get_P0();
+		}
 		return true;
 	}