In png/configure.in, there is code like the following:
TEA_ADD_INCLUDES([-I\"`\${CYGPATH} \${zlibtcl_BUILD_PATH}`\"])
Then, over in tclconfig/img.m4, there is this line:
$1_SRC_PATH="`dirname [$]$1_BUILD_STUB_LIB_PATH`/[$]$1_SRC_DIR"
Because [$]$1_SRC_DIR often resolves simply to ., and cygpath normalizes away that trailing . but leaves the trailing backslash, the png/configure.in line noted above ends up with the final quote inadvertently escaped. The most immediate solution might be to use the -m switch to cygpath, so that it yields slashes instead of whacks in the pathname.
Incidentally, $$1_SRC_DIR is recommended over [$]$1_SRC_DIR in the Autoconf documentation
Thank you for this bug report. Well analyzed. I'll change the -w to -m in the future, but first I want to wait for the result of the bug-report you sent to Cygwin. I had a short look into the Cygwin source-code, but it doesn't appear trivial to fix.