Index: oak-core/src/main/java/org/apache/jackrabbit/oak/plugins/blob/MarkSweepGarbageCollector.java
===================================================================
--- oak-core/src/main/java/org/apache/jackrabbit/oak/plugins/blob/MarkSweepGarbageCollector.java	(revision 1598486)
+++ oak-core/src/main/java/org/apache/jackrabbit/oak/plugins/blob/MarkSweepGarbageCollector.java	(working copy)
@@ -466,18 +466,21 @@
 
         private boolean done;
 
-        /** Temporary buffer. */
+        /** Temporary buffers. */
         private TreeSet<String> markedBuffer;
+        private TreeSet<String> allBuffer;
 
         /**
          * Instantiates a new file line difference iterator.
          */
-        public FileLineDifferenceIterator(File marked, File available, int batchSize) throws IOException {
+        public FileLineDifferenceIterator(File marked, File available, int batchSize)
+                throws IOException {
             this.markedIter = FileUtils.lineIterator(marked);
             this.allIter = FileUtils.lineIterator(available);
             this.batchSize = batchSize;
             queue = new ArrayDeque<String>(batchSize);
             markedBuffer = Sets.newTreeSet();
+            allBuffer = Sets.newTreeSet();
 
         }
 
@@ -540,11 +543,9 @@
             TreeSet<String> gcSet = new TreeSet<String>();
 
             // Iterate till the gc candidate set is at least SAVE_BATCH_COUNT or
-            // the
-            // blob id set iteration is complete
-            while (allIter.hasNext() &&
+            // the blob id set iteration is complete
+            while ((allIter.hasNext() || markedIter.hasNext()) &&
                     gcSet.size() < batchSize) {
-                TreeSet<String> allBuffer = new TreeSet<String>();
 
                 while (markedIter.hasNext() &&
                         markedBuffer.size() < batchSize) {
@@ -551,8 +552,9 @@
                     String stre = markedIter.next();
                     markedBuffer.add(stre);
                 }
-                while (allIter.hasNext() &&
-                        allBuffer.size() < batchSize) {
+                
+                while (allIter.hasNext()
+                        && allBuffer.size() < batchSize) {
                     String stre = allIter.next();
                     allBuffer.add(stre);
                 }
@@ -560,21 +562,30 @@
                 if (markedBuffer.isEmpty()) {
                     gcSet = allBuffer;
                 } else {
+                    TreeSet<String> allLeftoverBuffer = Sets.newTreeSet();
+                    TreeSet<String> markedLeftoverBuffer = Sets.newTreeSet();
+                    
+                    /* Remove & track elements in allBuffer > max seen in markedBuffer Or */
+                    /* Track elements in markedBuffer > max seen in allBuffer */
+                    if (allBuffer.last().compareTo(markedBuffer.last()) > 0) {
+                        allLeftoverBuffer.addAll(allBuffer.tailSet(markedBuffer.last(), false));
+                        allBuffer.removeAll(allLeftoverBuffer);
+                    } else if (allBuffer.last().compareTo(markedBuffer.last()) < 0) {
+                        markedLeftoverBuffer.addAll(markedBuffer.tailSet(allBuffer.last(), false));
+                    }
+                    
                     gcSet.addAll(
                             Sets.difference(allBuffer, markedBuffer));
 
-                    if (allBuffer.last().compareTo(markedBuffer.last()) < 0) {
-                        // filling markedLeftoverBuffer
-                        TreeSet<String> markedLeftoverBuffer = Sets.newTreeSet();
-                        markedLeftoverBuffer.addAll(markedBuffer.tailSet(allBuffer.last(), false));
-                        markedBuffer = markedLeftoverBuffer;
-                        markedLeftoverBuffer = null;
-                    } else {
-                        markedBuffer.clear();
-                    }
+                    markedBuffer = markedLeftoverBuffer;
+                    allBuffer = allLeftoverBuffer;
                 }
             }
-
+            // Add any potential leftover blobs to be gc'ed.
+            if (!allBuffer.isEmpty()) {
+                gcSet.addAll(allBuffer);
+                allBuffer.clear();
+            }
             return gcSet;
         }
 
@@ -583,7 +594,7 @@
             throw new UnsupportedOperationException();
         }
     }
-
+    
     /**
      * Provides a readable string for given timestamp
      */
Index: oak-core/src/test/java/org/apache/jackrabbit/oak/plugins/document/MongoBlobGCTest.java
===================================================================
--- oak-core/src/test/java/org/apache/jackrabbit/oak/plugins/document/MongoBlobGCTest.java	(revision 1598486)
+++ oak-core/src/test/java/org/apache/jackrabbit/oak/plugins/document/MongoBlobGCTest.java	(working copy)
@@ -19,7 +19,6 @@
 import static org.junit.Assert.assertTrue;
 
 import java.io.ByteArrayInputStream;
-import java.io.IOException;
 import java.io.InputStream;
 import java.util.HashSet;
 import java.util.Iterator;
@@ -61,7 +60,7 @@
         int number = 10;
         // track the number of the assets to be deleted
         List<Integer> processed = Lists.newArrayList();
-        Random rand = new Random();
+        Random rand = new Random(47);
         for (int i = 0; i < 5; i++) {
             int n = rand.nextInt(number);
             if (!processed.contains(n)) {
@@ -104,6 +103,18 @@
         return set;
     }
 
+    public HashSet<String> addInlined() throws Exception {
+        HashSet<String> set = new HashSet<String>();
+        DocumentNodeStore s = mk.getNodeStore();
+        NodeBuilder a = s.getRoot().builder();
+        int number = 12;
+        for (int i = 0; i < number; i++) {
+            Blob b = s.createBlob(randomStream(i, 50));
+            a.child("cinline" + i).setProperty("x", b);
+        }
+        s.merge(a, EmptyHook.INSTANCE, CommitInfo.EMPTY);
+        return set;
+    }
     private void deleteFromMongo(String nodeId) {
         DBCollection coll = mongoConnection.getDB().getCollection("nodes");
         BasicDBObject blobNodeObj = new BasicDBObject();
@@ -123,6 +134,18 @@
         gc(set);
     }
 
+    @Test
+    public void gcDirectMongoDeleteWithInlined() throws Exception {
+        HashSet<String> set = setUp(true);
+        addInlined();
+        gc(set);
+    }
+    @Test
+    public void gcVersionDeleteWithInlined() throws Exception {
+        HashSet<String> set = setUp(false);
+        addInlined();
+        gc(set);
+    }
     private void gc(HashSet<String> set) throws Exception {
         DocumentNodeStore store = mk.getNodeStore();
         MarkSweepGarbageCollector gc = new MarkSweepGarbageCollector(
@@ -129,12 +152,12 @@
                 new DocumentBlobReferenceRetriever(store),
                 (GarbageCollectableBlobStore) store.getBlobStore(),
                 MoreExecutors.sameThreadExecutor(),
-                "./target", 2048, true, 0);
+                "./target", 5, true, 0);
         gc.collectGarbage();
 
         Set<String> existing = iterate();
         boolean empty = Sets.intersection(set, existing).isEmpty();
-        assertTrue(empty);
+        assertTrue(empty && !existing.isEmpty());
     }
 
     protected Set<String> iterate() throws Exception {