diff --git a/account.go b/account.go
index 903443a..c1f9d3a 100644
--- a/account.go
+++ b/account.go
@@ -34,8 +34,7 @@ import (
 // addresses and keys), and tx and utxo stores, and a mutex to prevent
 // incorrect multiple access.
 type Account struct {
-	name       string
-	fullRescan bool
+	name string
 	*wallet.Wallet
 	TxStore *txstore.Store
 }
@@ -466,16 +465,7 @@ func (a *Account) Track() {
 func (a *Account) RescanActiveJob() (*RescanJob, error) {
 	// Determine the block necesary to start the rescan for all active
 	// addresses.
-	height := int32(0)
-	if a.fullRescan {
-		// Need to perform a complete rescan since the wallet creation
-		// block.
-		height = a.EarliestBlockHeight()
-	} else {
-		// The last synced block height should be used the starting
-		// point for block rescanning.  Grab the block stamp here.
-		height = a.SyncHeight()
-	}
+	height := a.SyncHeight()
 
 	actives := a.SortedActiveAddresses()
 	addrs := make([]btcutil.Address, 0, len(actives))
diff --git a/acctmgr.go b/acctmgr.go
index e21fe62..31914c7 100644
--- a/acctmgr.go
+++ b/acctmgr.go
@@ -25,6 +25,7 @@ import (
 	"github.com/conformal/btcwallet/txstore"
 	"github.com/conformal/btcwallet/wallet"
 	"github.com/conformal/btcwire"
+	"io/ioutil"
 	"os"
 	"strings"
 )
@@ -198,38 +199,86 @@ func openSavedAccount(name string, cfg *config) (*Account, error) {
 		msg := fmt.Sprintf("cannot open wallet file: %s", err)
 		return nil, &walletOpenError{msg}
 	}
-	defer func() {
+	closeWallet := func() {
 		if err := wfile.Close(); err != nil {
 			log.Warnf("Cannot close wallet file: %v", err)
 		}
-	}()
-
+	}
 	if _, err = wlt.ReadFrom(wfile); err != nil {
 		msg := fmt.Sprintf("cannot read wallet: %s", err)
+		closeWallet()
 		return nil, &walletOpenError{msg}
 	}
 
 	// Read tx file.  If this fails, return a errNoTxs error and let
 	// the caller decide if a rescan is necessary.
-	var finalErr error
 	txfile, err := os.Open(txfilepath)
 	if err != nil {
-		log.Errorf("cannot open tx file: %s", err)
-		a.fullRescan = true
+		log.Errorf("Cannot open tx file: %s", err)
+
+		// Mark wallet as unsynced and write back to disk..  Later calls
+		// to SyncHeight will use the wallet creation height, or possibly
+		// an earlier height for imported keys.
+		a.SetSyncedWith(nil)
+		closeWallet()
+		tmpwallet, err := ioutil.TempFile(netdir, "wallet.bin")
+		if err != nil {
+			log.Errorf("Cannot create temporary wallet: %v", err)
+			return a, errNoTxs
+		}
+		if _, err := wlt.WriteTo(tmpwallet); err != nil {
+			log.Warnf("Cannot write back unsynced wallet: %v", err)
+			return a, errNoTxs
+		}
+		tmpwalletpath := tmpwallet.Name()
+		if err := tmpwallet.Close(); err != nil {
+			log.Warnf("Cannot close temporary wallet file: %v", err)
+			return a, errNoTxs
+		}
+		if err := Rename(tmpwalletpath, wfilepath); err != nil {
+			log.Warnf("Cannot move temporary wallet file: %v", err)
+			return a, errNoTxs
+		}
+
+		// Create and write empty txstore, if it doesn't exist.
+		if !fileExists(txfilepath) {
+			txfile, err = os.Create(txfilepath)
+			if err != nil {
+				log.Warnf("Cannot create new new txstore file: %v", err)
+				return a, errNoTxs
+			}
+			defer func() {
+				if err := txfile.Close(); err != nil {
+					log.Warnf("Cannot close txstore file: %v", err)
+				}
+			}()
+			if _, err := txs.WriteTo(txfile); err != nil {
+				log.Warnf("Cannot write new txstore file: %v", err)
+			}
+		}
 		return a, errNoTxs
 	}
+	defer closeWallet()
 	defer func() {
 		if err := txfile.Close(); err != nil {
 			log.Warnf("Cannot close txstore file: %v", err)
 		}
 	}()
 	if _, err = txs.ReadFrom(txfile); err != nil {
-		log.Errorf("cannot read tx file: %s", err)
-		a.fullRescan = true
-		finalErr = errNoTxs
+		log.Errorf("Cannot read tx file: %s", err)
+
+		// Mark wallet as unsynced.  Later calls to SyncHeight will use the
+		// wallet creation height, or possibly an earlier height for
+		// imported keys.
+		a.SetSyncedWith(nil)
+
+		if _, err := txs.WriteTo(txfile); err != nil {
+			log.Warnf("Cannot write new txstore file: %v", err)
+		}
+		return a, errNoTxs
 	}
 
-	return a, finalErr
+	return a, nil
 }
 
 // openAccounts attempts to open all saved accounts.
@@ -394,7 +443,6 @@ func (am *AccountManager) rescanListener() {
 						continue
 					}
 				}
-				acct.fullRescan = false
 				am.ds.ScheduleWalletWrite(acct)
 				err := am.ds.FlushAccount(acct)
 				if err != nil {
@@ -420,7 +468,6 @@ func (am *AccountManager) rescanListener() {
 						continue
 					}
 				}
-				acct.fullRescan = false
 				am.ds.ScheduleWalletWrite(acct)
 				err := am.ds.FlushAccount(acct)
 				if err != nil {
diff --git a/sockets.go b/sockets.go
index 7b600d5..0a898e8 100644
--- a/sockets.go
+++ b/sockets.go
@@ -809,14 +809,8 @@ func Handshake(rpc ServerConn) error {
 		return nil
 	}
 
-	log.Warnf("None of the previous saved blocks in btcd chain.  Must perform full rescan.")
-
 	// Iterator was invalid (wallet has never been synced) or there was a
-	// huge chain fork + reorg (more than 20 blocks).  Since we don't know
-	// what block (if any) this wallet is synced to, roll back everything
-	// and start a new rescan since the earliest block wallet must know
-	// about.
-	a.fullRescan = true
+	// huge chain fork + reorg (more than 20 blocks).
 	AcctMgr.Track()
 	if err := AcctMgr.RescanActiveAddresses(); err != nil {
 		return err
diff --git a/wallet/wallet.go b/wallet/wallet.go
index e3de5a2..c2b72d1 100644
--- a/wallet/wallet.go
+++ b/wallet/wallet.go
@@ -1259,7 +1259,16 @@ func (w *Wallet) SetSyncStatus(a btcutil.Address, s SyncStatus) error {
 // Unsynced addresses are unaffected by this method and must be marked
 // as in sync with MarkAddressSynced or MarkAllSynced to be considered
 // in sync with bs.
+//
+// If bs is nil, the entire wallet is marked unsynced.
 func (w *Wallet) SetSyncedWith(bs *BlockStamp) {
+	if bs == nil {
+		w.recent.hashes = w.recent.hashes[:0]
+		w.recent.lastHeight = w.keyGenerator.firstBlock
+		w.keyGenerator.setSyncStatus(Unsynced(w.keyGenerator.firstBlock))
+		return
+	}
+
 	// Check if we're trying to rollback the last seen history.
 	// If so, and this bs is already saved, remove anything
 	// after and return.  Otherwire, remove previous hashes.
@@ -1299,12 +1308,8 @@ func (w *Wallet) SetSyncedWith(bs *BlockStamp) {
 // addresses marked as unsynced, whichever is smaller.  This is the
 // height that rescans on an entire wallet should begin at to fully
 // sync all wallet addresses.
-func (w *Wallet) SyncHeight() (height int32) {
-	if len(w.recent.hashes) == 0 {
-		return 0
-	}
-	height = w.recent.lastHeight
-
+func (w *Wallet) SyncHeight() int32 {
+	height := w.recent.lastHeight
 	for _, a := range w.addrMap {
 		var syncHeight int32
 		switch e := a.SyncStatus().(type) {
@@ -1324,7 +1329,6 @@ func (w *Wallet) SyncHeight() (height int32) {
 			}
 		}
 	}
-
 	return height
 }
 
@@ -1335,42 +1339,6 @@ func (w *Wallet) NewIterateRecentBlocks() RecentBlockIterator {
 	return w.recent.NewIterator()
 }
 
-// EarliestBlockHeight returns the height of the blockchain for when any
-// wallet address first appeared.  This will usually be the block height
-// at the time of wallet creation, unless a private key with an earlier
-// block height was imported into the wallet. This is needed when
-// performing a full rescan to prevent unnecessary rescanning before
-// wallet addresses first appeared.
-func (w *Wallet) EarliestBlockHeight() int32 {
-	height := w.keyGenerator.firstBlock
-
-	// Imported keys will be the only ones that may have an earlier
-	// blockchain height.  Check each and set the returned height
-	for _, addr := range w.importedAddrs {
-		aheight := addr.FirstBlock()
-		if aheight < height {
-			height = aheight
-
-			// Can't go any lower than 0.
-			if height == 0 {
-				break
-			}
-		}
-	}
-
-	return height
-}
-
-// SetBetterEarliestBlockHeight sets a better earliest block height.
-// At wallet creation time, a earliest block is guessed, but this
-// could be incorrect if btcd is out of sync.  This function can be
-// used to correct a previous guess with a better value.
-func (w *Wallet) SetBetterEarliestBlockHeight(height int32) {
-	if height > w.keyGenerator.firstBlock {
-		w.keyGenerator.firstBlock = height
-	}
-}
-
 // ImportPrivateKey imports a WIF private key into the keystore.  The imported
 // address is created using either a compressed or uncompressed serialized
 // public key, depending on the CompressPubKey bool of the WIF.
@@ -1822,13 +1790,6 @@ func (rb *recentBlocks) ReadFrom(r io.Reader) (int64, error) {
 		return read, errors.New("number of last seen blocks exceeds maximum of 20")
 	}
 
-	// If number of blocks is 0, our work here is done.
-	if nBlocks == 0 {
-		rb.lastHeight = -1
-		rb.hashes = nil
-		return read, nil
-	}
-
 	// Read most recently seen block height.
 	var heightBytes [4]byte // 4 bytes for a int32
 	n, err = io.ReadFull(r, heightBytes[:])
@@ -1876,9 +1837,6 @@ func (rb *recentBlocks) WriteTo(w io.Writer) (int64, error) {
 	if nBlocks != 0 && rb.lastHeight < 0 {
 		return written, errors.New("number of block hashes is positive, but height is negative")
 	}
-	if nBlocks == 0 && rb.lastHeight != -1 {
-		return written, errors.New("no block hashes available, but height is not -1")
-	}
 	var nBlockBytes [4]byte // 4 bytes for a uint32
 	binary.LittleEndian.PutUint32(nBlockBytes[:], nBlocks)
 	n, err := w.Write(nBlockBytes[:])
@@ -1886,10 +1844,6 @@ func (rb *recentBlocks) WriteTo(w io.Writer) (int64, error) {
 	if err != nil {
 		return written, err
 	}
-	// If number of blocks is 0, our work here is done.
-	if nBlocks == 0 {
-		return written, nil
-	}
 
 	// Write most recently seen block height.
 	var heightBytes [4]byte // 4 bytes for a int32
@@ -1921,7 +1875,7 @@ type RecentBlockIterator interface {
 }
 
 func (rb *recentBlocks) NewIterator() RecentBlockIterator {
-	if rb.lastHeight == -1 {
+	if rb.lastHeight == -1 || len(rb.hashes) == 0 {
 		return nil
 	}
 	return &blockIterator{
diff --git a/wallet/wallet_test.go b/wallet/wallet_test.go
index 2fe7839..b4a970d 100644
--- a/wallet/wallet_test.go
+++ b/wallet/wallet_test.go
@@ -751,10 +751,6 @@ func TestImportPrivateKey(t *testing.T) {
 
 	// verify that the entire wallet's sync height matches the
 	// expected createHeight.
-	if h := w.EarliestBlockHeight(); h != createHeight {
-		t.Error("Initial earliest height %v does not match expected %v.", h, createHeight)
-		return
-	}
 	if h := w.SyncHeight(); h != createHeight {
 		t.Error("Initial sync height %v does not match expected %v.", h, createHeight)
 		return
@@ -791,12 +787,7 @@ func TestImportPrivateKey(t *testing.T) {
 		return
 	}
 
-	// verify that the earliest block and sync heights now match the
-	// (smaller) import height.
-	if h := w.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After import earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
+	// verify that the sync height now match the (smaller) import height.
 	if h := w.SyncHeight(); h != importHeight {
 		t.Errorf("After import sync height %v does not match expected %v.", h, importHeight)
 		return
@@ -818,11 +809,7 @@ func TestImportPrivateKey(t *testing.T) {
 		return
 	}
 
-	// Verify that the earliest and sync height match expected after the reserialization.
-	if h := w2.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After reserialization earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
+	// Verify that the  sync height match expected after the reserialization.
 	if h := w2.SyncHeight(); h != importHeight {
 		t.Errorf("After reserialization sync height %v does not match expected %v.", h, importHeight)
 		return
@@ -835,10 +822,6 @@ func TestImportPrivateKey(t *testing.T) {
 		t.Errorf("Cannot mark address partially synced: %v", err)
 		return
 	}
-	if h := w2.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After address partial sync, earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
 	if h := w2.SyncHeight(); h != partialHeight {
 		t.Errorf("After address partial sync, sync height %v does not match expected %v.", h, partialHeight)
 		return
@@ -871,10 +854,6 @@ func TestImportPrivateKey(t *testing.T) {
 		t.Errorf("Cannot mark address synced: %v", err)
 		return
 	}
-	if h := w3.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After address unsync, earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
 	if h := w3.SyncHeight(); h != importHeight {
 		t.Errorf("After address unsync, sync height %v does not match expected %v.", h, importHeight)
 		return
@@ -887,10 +866,6 @@ func TestImportPrivateKey(t *testing.T) {
 		t.Errorf("Cannot mark address synced: %v", err)
 		return
 	}
-	if h := w3.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After address sync, earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
 	if h := w3.SyncHeight(); h != createHeight {
 		t.Errorf("After address sync, sync height %v does not match expected %v.", h, createHeight)
 		return
@@ -940,10 +915,6 @@ func TestImportScript(t *testing.T) {
 
 	// verify that the entire wallet's sync height matches the
 	// expected createHeight.
-	if h := w.EarliestBlockHeight(); h != createHeight {
-		t.Error("Initial earliest height %v does not match expected %v.", h, createHeight)
-		return
-	}
 	if h := w.SyncHeight(); h != createHeight {
 		t.Error("Initial sync height %v does not match expected %v.", h, createHeight)
 		return
@@ -1017,12 +988,7 @@ func TestImportScript(t *testing.T) {
 		return
 	}
 
-	// verify that the earliest block and sync heights now match the
-	// (smaller) import height.
-	if h := w.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After import earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
+	// verify that the sync height now match the (smaller) import height.
 	if h := w.SyncHeight(); h != importHeight {
 		t.Errorf("After import sync height %v does not match expected %v.", h, importHeight)
 		return
@@ -1044,11 +1010,7 @@ func TestImportScript(t *testing.T) {
 		return
 	}
 
-	// Verify that the earliest and sync height match expected after the reserialization.
-	if h := w2.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After reserialization earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
+	// Verify that the sync height matches expected after the reserialization.
 	if h := w2.SyncHeight(); h != importHeight {
 		t.Errorf("After reserialization sync height %v does not match expected %v.", h, importHeight)
 		return
@@ -1127,10 +1089,6 @@ func TestImportScript(t *testing.T) {
 		t.Errorf("Cannot mark address partially synced: %v", err)
 		return
 	}
-	if h := w2.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After address partial sync, earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
 	if h := w2.SyncHeight(); h != partialHeight {
 		t.Errorf("After address partial sync, sync height %v does not match expected %v.", h, partialHeight)
 		return
@@ -1163,10 +1121,6 @@ func TestImportScript(t *testing.T) {
 		t.Errorf("Cannot mark address synced: %v", err)
 		return
 	}
-	if h := w3.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After address unsync, earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
 	if h := w3.SyncHeight(); h != importHeight {
 		t.Errorf("After address unsync, sync height %v does not match expected %v.", h, importHeight)
 		return
@@ -1179,10 +1133,6 @@ func TestImportScript(t *testing.T) {
 		t.Errorf("Cannot mark address synced: %v", err)
 		return
 	}
-	if h := w3.EarliestBlockHeight(); h != importHeight {
-		t.Errorf("After address sync, earliest height %v does not match expected %v.", h, importHeight)
-		return
-	}
 	if h := w3.SyncHeight(); h != createHeight {
 		t.Errorf("After address sync, sync height %v does not match expected %v.", h, createHeight)
 		return