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The Rec is silent on the implications of failure of schemaLocation to resolve for redefine. See http://lists.w3.org/Archives/Public/www-xml-schema-comments/2004JanMar/0088.html
This issue was marked RESOLVED on 29 March. The originators of the issue (Henry Thompson and Noah Mendelsohn) both being members of the WG, they are assumed to be aware of the decision and to assent to it. In any case, a month has elapsed without the issue having been reopened. Accordingly, I'm marking this issue CLOSED.