diff --git a/.claude-plugin/marketplace.json b/.claude-plugin/marketplace.json
index 8191847d..84015344 100644
--- a/.claude-plugin/marketplace.json
+++ b/.claude-plugin/marketplace.json
@@ -10,7 +10,7 @@
   "plugins": [
     {
       "name": "claude-mem",
-      "version": "7.1.1",
+      "version": "7.1.2",
       "source": "./plugin",
       "description": "Persistent memory system for Claude Code - context compression across sessions"
     }
diff --git a/CLAUDE.md b/CLAUDE.md
index 9fb2215b..9b034175 100644
--- a/CLAUDE.md
+++ b/CLAUDE.md
@@ -6,7 +6,7 @@
 
 Claude-mem is a Claude Code plugin providing persistent memory across sessions. It captures tool usage, compresses observations using the Claude Agent SDK, and injects relevant context into future sessions.
 
-**Current Version**: 7.1.1
+**Current Version**: 7.1.2
 
 ## Architecture
 
diff --git a/package.json b/package.json
index 0f9056d1..90ec87cf 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "claude-mem",
-  "version": "7.1.1",
+  "version": "7.1.2",
   "description": "Memory compression system for Claude Code - persist context across sessions",
   "keywords": [
     "claude",
diff --git a/plugin/.claude-plugin/plugin.json b/plugin/.claude-plugin/plugin.json
index d280d41a..3728f529 100644
--- a/plugin/.claude-plugin/plugin.json
+++ b/plugin/.claude-plugin/plugin.json
@@ -1,6 +1,6 @@
 {
   "name": "claude-mem",
-  "version": "7.1.1",
+  "version": "7.1.2",
   "description": "Persistent memory system for Claude Code - seamlessly preserve context across sessions",
   "author": {
     "name": "Alex Newman"
diff --git a/scripts/smart-install.js b/scripts/smart-install.js
index a64a3a3d..1a04fd24 100644
--- a/scripts/smart-install.js
+++ b/scripts/smart-install.js
@@ -24,18 +24,56 @@ function isBunInstalled() {
       stdio: ['pipe', 'pipe', 'pipe'],
       shell: IS_WINDOWS
     });
-    return result.status === 0;
+    if (result.status === 0) return true;
   } catch {
-    return false;
+    // PATH check failed, try common installation paths
   }
+
+  // Check common installation paths (handles fresh installs before PATH reload)
+  const bunPaths = IS_WINDOWS
+    ? [join(homedir(), '.bun', 'bin', 'bun.exe')]
+    : [join(homedir(), '.bun', 'bin', 'bun'), '/usr/local/bin/bun'];
+
+  return bunPaths.some(existsSync);
+}
+
+/**
+ * Get the Bun executable path (from PATH or common install locations)
+ */
+function getBunPath() {
+  // Try PATH first
+  try {
+    const result = spawnSync('bun', ['--version'], {
+      encoding: 'utf-8',
+      stdio: ['pipe', 'pipe', 'pipe'],
+      shell: IS_WINDOWS
+    });
+    if (result.status === 0) return 'bun';
+  } catch {
+    // Not in PATH
+  }
+
+  // Check common installation paths
+  const bunPaths = IS_WINDOWS
+    ? [join(homedir(), '.bun', 'bin', 'bun.exe')]
+    : [join(homedir(), '.bun', 'bin', 'bun'), '/usr/local/bin/bun'];
+
+  for (const bunPath of bunPaths) {
+    if (existsSync(bunPath)) return bunPath;
+  }
+
+  return null;
 }
 
 /**
  * Get Bun version if installed
  */
 function getBunVersion() {
+  const bunPath = getBunPath();
+  if (!bunPath) return null;
+
   try {
-    const result = spawnSync('bun', ['--version'], {
+    const result = spawnSync(bunPath, ['--version'], {
       encoding: 'utf-8',
       stdio: ['pipe', 'pipe', 'pipe'],
       shell: IS_WINDOWS
@@ -56,10 +94,17 @@ function isUvInstalled() {
       stdio: ['pipe', 'pipe', 'pipe'],
       shell: IS_WINDOWS
     });
-    return result.status === 0;
+    if (result.status === 0) return true;
   } catch {
-    return false;
+    // PATH check failed, try common installation paths
   }
+
+  // Check common installation paths (handles fresh installs before PATH reload)
+  const uvPaths = IS_WINDOWS
+    ? [join(homedir(), '.local', 'bin', 'uv.exe'), join(homedir(), '.cargo', 'bin', 'uv.exe')]
+    : [join(homedir(), '.local', 'bin', 'uv'), join(homedir(), '.cargo', 'bin', 'uv'), '/usr/local/bin/uv'];
+
+  return uvPaths.some(existsSync);
 }
 
 /**
@@ -226,12 +271,21 @@ function needsInstall() {
  * Install dependencies using Bun
  */
 function installDeps() {
+  const bunPath = getBunPath();
+  if (!bunPath) {
+    throw new Error('Bun executable not found');
+  }
+
   console.error('📦 Installing dependencies with Bun...');
+
+  // Quote path for Windows paths with spaces
+  const bunCmd = IS_WINDOWS && bunPath.includes(' ') ? `"${bunPath}"` : bunPath;
+
   try {
-    execSync('bun install', { cwd: ROOT, stdio: 'inherit', shell: IS_WINDOWS });
+    execSync(`${bunCmd} install`, { cwd: ROOT, stdio: 'inherit', shell: IS_WINDOWS });
   } catch {
     // Retry with force flag
-    execSync('bun install --force', { cwd: ROOT, stdio: 'inherit', shell: IS_WINDOWS });
+    execSync(`${bunCmd} install --force`, { cwd: ROOT, stdio: 'inherit', shell: IS_WINDOWS });
   }
 
   // Write version marker
diff --git a/src/shared/hook-error-handler.ts b/src/shared/hook-error-handler.ts
index 30e9b7bf..4711d28c 100644
--- a/src/shared/hook-error-handler.ts
+++ b/src/shared/hook-error-handler.ts
@@ -4,8 +4,10 @@
  */
 export function handleWorkerError(error: any): never {
   if (error.cause?.code === 'ECONNREFUSED' ||
+      error.code === 'ConnectionRefused' ||  // Bun-specific error format
       error.name === 'TimeoutError' ||
-      error.message?.includes('fetch failed')) {
+      error.message?.includes('fetch failed') ||
+      error.message?.includes('Unable to connect')) {
     throw new Error(
       "There's a problem with the worker. Try: npm run worker:restart"
     );
diff --git a/src/shared/worker-utils.ts b/src/shared/worker-utils.ts
index 60238ed1..27d800f7 100644
--- a/src/shared/worker-utils.ts
+++ b/src/shared/worker-utils.ts
@@ -194,13 +194,6 @@ export async function ensureWorkerRunning(): Promise<void> {
   // Try to start the worker
   const started = await startWorker();
 
-  // Final health check before throwing error
-  // Worker might be already running but was temporarily unresponsive
-  if (!started && await isWorkerHealthy()) {
-    await ensureWorkerVersionMatches();
-    return;
-  }
-
   if (!started) {
     const port = getWorkerPort();
     throw new Error(
@@ -209,4 +202,22 @@ export async function ensureWorkerRunning(): Promise<void> {
       `If already running, try: npm run worker:restart`
     );
   }
+
+  // Wait for worker to become responsive after starting
+  // Try up to 5 times with 500ms delays (2.5 seconds total)
+  for (let i = 0; i < 5; i++) {
+    await new Promise(resolve => setTimeout(resolve, 500));
+    if (await isWorkerHealthy()) {
+      await ensureWorkerVersionMatches();
+      return;
+    }
+  }
+
+  // Worker started but isn't responding
+  const port = getWorkerPort();
+  logger.error('SYSTEM', 'Worker started but not responding to health checks');
+  throw new Error(
+    `Worker service started but is not responding on port ${port}.\n\n` +
+    `Try: npm run worker:restart`
+  );
 }