diff --git a/src/resources/extensions/gsd/gitignore.ts b/src/resources/extensions/gsd/gitignore.ts
index 04b166225..cb65f8c00 100644
--- a/src/resources/extensions/gsd/gitignore.ts
+++ b/src/resources/extensions/gsd/gitignore.ts
@@ -7,9 +7,11 @@
  */
 
 import { join } from "node:path";
+import { execFileSync } from "node:child_process";
 import { existsSync, lstatSync, readFileSync, writeFileSync } from "node:fs";
 import { nativeRmCached, nativeLsFiles } from "./native-git-bridge.js";
 import { gsdRoot } from "./paths.js";
+import { GIT_NO_PROMPT_ENV } from "./git-constants.js";
 
 /**
  * GSD runtime patterns for git index cleanup.
@@ -104,10 +106,22 @@ export function hasGitTrackedGsdFiles(basePath: string): boolean {
   // Check if git tracks any files under .gsd/
   try {
     const tracked = nativeLsFiles(basePath, ".gsd");
-    return tracked.length > 0;
-  } catch {
-    // Not a git repo or git not available — safe to proceed
+    if (tracked.length > 0) return true;
+
+    // nativeLsFiles swallows git failures and returns []. An empty result
+    // could mean "nothing tracked" OR "git failed silently". Verify git is
+    // reachable before trusting the empty result — if it isn't, fail safe
+    // by assuming files ARE tracked to prevent data loss.
+    execFileSync("git", ["rev-parse", "--git-dir"], {
+      cwd: basePath,
+      stdio: "pipe",
+      env: GIT_NO_PROMPT_ENV,
+    });
+
     return false;
+  } catch {
+    // git unavailable, index locked, or repo corrupt — fail safe
+    return true;
   }
 }
 
diff --git a/src/resources/extensions/gsd/migrate-external.ts b/src/resources/extensions/gsd/migrate-external.ts
index 4e36f8978..4fd53e7d1 100644
--- a/src/resources/extensions/gsd/migrate-external.ts
+++ b/src/resources/extensions/gsd/migrate-external.ts
@@ -6,11 +6,13 @@
  * symlink replaces the original directory so all paths remain valid.
  */
 
+import { execFileSync } from "node:child_process";
 import { existsSync, lstatSync, mkdirSync, readdirSync, realpathSync, renameSync, cpSync, rmSync, symlinkSync } from "node:fs";
 import { join } from "node:path";
 import { externalGsdRoot } from "./repo-identity.js";
 import { getErrorMessage } from "./error-utils.js";
 import { hasGitTrackedGsdFiles } from "./gitignore.js";
+import { GIT_NO_PROMPT_ENV } from "./git-constants.js";
 
 export interface MigrationResult {
   migrated: boolean;
@@ -144,7 +146,22 @@ export function migrateToExternalState(basePath: string): MigrationResult {
       return { migrated: false, error: `Migration verification failed: ${getErrorMessage(verifyErr)}` };
     }
 
-    // Remove .gsd.migrating only after symlink is verified
+    // Clean the git index — any .gsd/* files tracked before migration now
+    // sit behind the symlink and git can't follow it, causing them to show
+    // as deleted. Remove them from the index so the working tree stays clean.
+    // --ignore-unmatch makes this a no-op on fresh projects with no tracked .gsd/.
+    try {
+      execFileSync("git", ["rm", "-r", "--cached", "--ignore-unmatch", ".gsd"], {
+        cwd: basePath,
+        stdio: ["ignore", "pipe", "ignore"],
+        env: GIT_NO_PROMPT_ENV,
+        timeout: 10_000,
+      });
+    } catch {
+      // Non-fatal — git may be unavailable or nothing was tracked
+    }
+
+    // Remove .gsd.migrating only after symlink is verified and index is clean
     rmSync(migratingPath, { recursive: true, force: true });
 
     return { migrated: true };
diff --git a/src/resources/extensions/gsd/tests/gitignore-tracked-gsd.test.ts b/src/resources/extensions/gsd/tests/gitignore-tracked-gsd.test.ts
index b0b7301fd..b9bda919a 100644
--- a/src/resources/extensions/gsd/tests/gitignore-tracked-gsd.test.ts
+++ b/src/resources/extensions/gsd/tests/gitignore-tracked-gsd.test.ts
@@ -183,6 +183,28 @@ test("ensureGitignore with tracked .gsd/ does not cause git to see files as dele
   }
 });
 
+test("hasGitTrackedGsdFiles returns true (fail-safe) when git is not available", () => {
+  const dir = makeTempRepo();
+  try {
+    // Create and track .gsd/ files
+    mkdirSync(join(dir, ".gsd"), { recursive: true });
+    writeFileSync(join(dir, ".gsd", "PROJECT.md"), "# Project\n");
+    git(dir, "add", ".gsd/");
+    git(dir, "commit", "-m", "track gsd");
+
+    // Corrupt the git index to simulate git failure
+    const indexPath = join(dir, ".git", "index.lock");
+    writeFileSync(indexPath, "locked");
+
+    // Should fail safe — assume tracked rather than silently returning false
+    // (The index lock causes git ls-files to fail; rev-parse also fails → true)
+    const result = hasGitTrackedGsdFiles(dir);
+    assert.equal(result, true, "Should return true (fail-safe) when git is unavailable");
+  } finally {
+    cleanup(dir);
+  }
+});
+
 // ─── migrateToExternalState — tracked .gsd/ protection ──────────────
 
 test("migrateToExternalState aborts when .gsd/ has tracked files (#1364)", () => {
@@ -212,3 +234,31 @@ test("migrateToExternalState aborts when .gsd/ has tracked files (#1364)", () =>
     cleanup(dir);
   }
 });
+
+test("migrateToExternalState cleans git index so tracked files don't show as deleted (#1364 path 2)", () => {
+  const dir = makeTempRepo();
+  try {
+    // Track .gsd/ files, then untrack them so migration proceeds
+    mkdirSync(join(dir, ".gsd", "milestones", "M001"), { recursive: true });
+    writeFileSync(join(dir, ".gsd", "PROJECT.md"), "# Project\n");
+    writeFileSync(join(dir, ".gsd", "milestones", "M001", "PLAN.md"), "# Plan\n");
+    git(dir, "add", ".gsd/");
+    git(dir, "commit", "-m", "track gsd state");
+    git(dir, "rm", "-r", "--cached", ".gsd/");
+    git(dir, "commit", "-m", "untrack gsd (simulates pre-migration project)");
+
+    const result = migrateToExternalState(dir);
+    assert.equal(result.migrated, true, "Migration should succeed");
+
+    // git status must show NO deleted files after migration
+    const status = git(dir, "status", "--porcelain");
+    const deletions = status.split("\n").filter((l) => /^\s*D\s/.test(l) || /^D\s/.test(l));
+    assert.equal(
+      deletions.length,
+      0,
+      `Expected no deleted files after migration, but found:\n${deletions.join("\n")}`,
+    );
+  } finally {
+    cleanup(dir);
+  }
+});