qmake's handling of paths with spaces in prl files is broken

It seems that so many things are going wrong here that I must just be doing something stupid, but I've been unable to generate a functional build, so I really could use some help.

I've attached a log of my output, and here's a basic overview of the problems:

1. Starts with the shown configure. I've tried several different combinations (from various posts) - none seem to do the trick.

2. Looks like everything is OK, so I start the "nmake"

3. Chugs along for a couple hours, then ends with the error shown "~ missing Files.obj"

4. However, doing an nmake at the qtbase level succeeds - indicating that the base was fully built.

5. Now the really odd part. Trying to qmake/nmake one of the examples totally fails. It runs without error, but does not execute any build steps and does not produce executables.