diff --git a/dht_test.go b/dht_test.go
index 2e51961..01558ef 100644
--- a/dht_test.go
+++ b/dht_test.go
@@ -901,6 +901,41 @@ func TestLayeredGet(t *testing.T) {
 	}
 }
 
+func TestUnfindablePeer(t *testing.T) {
+	if testing.Short() {
+		t.SkipNow()
+	}
+
+	ctx, cancel := context.WithCancel(context.Background())
+	defer cancel()
+
+	maddrs, peers, dhts := setupDHTS(ctx, 4, t)
+	defer func() {
+		for i := 0; i < 4; i++ {
+			dhts[i].Close()
+			dhts[i].host.Close()
+		}
+	}()
+
+	connect(t, ctx, dhts[0], dhts[1])
+	connect(t, ctx, dhts[1], dhts[2])
+	connect(t, ctx, dhts[2], dhts[3])
+
+	// Give DHT 1 a bad addr for DHT 2.
+	dhts[1].host.Peerstore().ClearAddrs(peers[2])
+	dhts[1].host.Peerstore().AddAddr(peers[2], maddrs[0], time.Minute)
+
+	ctxT, cancel := context.WithTimeout(ctx, time.Second)
+	defer cancel()
+	_, err := dhts[0].FindPeer(ctxT, peers[3])
+	if err == nil {
+		t.Error("should have failed to find peer")
+	}
+	if ctxT.Err() != nil {
+		t.Error("FindPeer should have failed before context expired")
+	}
+}
+
 func TestFindPeer(t *testing.T) {
 	// t.Skip("skipping test to debug another")
 	if testing.Short() {
diff --git a/dial_queue.go b/dial_queue.go
index 75cc703..9d58a42 100644
--- a/dial_queue.go
+++ b/dial_queue.go
@@ -315,7 +315,11 @@ func (dq *dialQueue) worker() {
 			return
 		case <-idleTimer.C:
 			// no new dial requests during our idle period; time to scale down.
-		case p := <-dq.in.DeqChan:
+		case p, ok := <-dq.in.DeqChan:
+			if !ok {
+				return
+			}
+
 			t := time.Now()
 			if err := dq.dialFn(dq.ctx, p); err != nil {
 				logger.Debugf("discarding dialled peer because of error: %v", err)
diff --git a/query.go b/query.go
index 0a730d7..2219940 100644
--- a/query.go
+++ b/query.go
@@ -259,6 +259,9 @@ func (r *dhtQueryRunner) dialPeer(ctx context.Context, p peer.ID) error {
 		r.Lock()
 		r.errs = append(r.errs, err)
 		r.Unlock()
+
+		// This peer is dropping out of the race.
+		r.peersRemaining.Decrement(1)
 		return err
 	}
 	logger.Debugf("connected. dial success.")