Using the version from Emacs 20.3.10 works. I only have XEmacs 21.1.2,
sorry if you've already fixed this.
$ cd ~/l
$ ls -l conf.c
lrwxr-xr-x 1 jas usr 9 Jun 13 22:14 conf.c -> ../conf.c
M-x cd RET ~/l RET
C-: (file-chase-links "conf.c") RET
Signaling: (wrong-type-argument stringp nil)
directory-file-name(nil)
file-chase-links("conf.c")
eval((file-chase-links "conf.c"))
#<compiled-function (expression &optional eval-expression-insert-value)
"...(26)" [eval expression values prin1 eval-expression-insert-value t] 3 729997
(list (read-from-minibuffer "Eval: " nil read-expression-map t ...)
current-prefix-arg)>((file-chase-links "conf.c") nil)
call-interactively(eval-expression)