Hey @sullenor, sorry I haven't looked at this PR yet. I've just had a look through the diff here and on css-modules/css-modules-loader-core#25

So the bug is to do with importing from files inside node_modules? Or is specifically to do with postcss-url? Trying to figure out why this needs to have breaking changes to this module....

In beginning, I found that problem, when I tried to work with postcss-url plugin. Basically, the problem comes from the way the css-loader uses postcss plugin's API.

The css-loader creates a single pipeline for each processing file and provides file content and file path to it. File path affects the source property of nodes in the result CSS tree which is used by plugins. I found out that css-loader provides short paths to the pipeline: https://github.com/css-modules/css-modules-loader-core/blob/master/src/index.js#L17 which are not relevant to the original file. So the plugins which use provided file path to resolve paths in the code don't work. Also it may result in generating wrong source maps.

I decided to fix it by providing relevant paths here: https://github.com/css-modules/css-modules-loader-core/blob/master/src/index.js#L17
Also, those paths were used by the scope plugin to generate class names. So I tried to keep them short only in the scope plugin.

Also, I made a quick solution as another postcss plugin which fixes paths: https://github.com/sullenor/todos/blob/master/postcss-fix-paths.js
It is a small hack, but it works :)
You can see the usage in the todos project: https://github.com/sullenor/todos/blob/master/gulpfile.babel.js#L22-L41

I use it load icons from the font-awesome package