diff --git a/source/slang/slang-ast-support-types.h b/source/slang/slang-ast-support-types.h
index 2581630dd3..72707ab38a 100644
--- a/source/slang/slang-ast-support-types.h
+++ b/source/slang/slang-ast-support-types.h
@@ -419,6 +419,10 @@ enum class DeclCheckState : uint8_t
     ///
     Unchecked,
 
+    /// The declaration is parsed and inserted into the initial scope,
+    /// ready for future lookups from within the parser for disambiguation purposes.
+    ReadyForParserLookup,
+
     /// Basic checks on the modifiers of the declaration have been applied.
     ///
     /// For example, when a declaration has attributes, the transformation
diff --git a/source/slang/slang-check-decl.cpp b/source/slang/slang-check-decl.cpp
index 79271a1dc3..7456891750 100644
--- a/source/slang/slang-check-decl.cpp
+++ b/source/slang/slang-check-decl.cpp
@@ -10975,6 +10975,9 @@ static void _dispatchDeclCheckingVisitor(Decl* decl, DeclCheckState state, Seman
 {
     switch (state)
     {
+    case DeclCheckState::ReadyForParserLookup:
+        // We don't need to do anything to make a decl ready for parser lookup.
+        break;
     case DeclCheckState::ModifiersChecked:
         SemanticsDeclModifiersVisitor(shared).dispatch(decl);
         break;
diff --git a/source/slang/slang-check-stmt.cpp b/source/slang/slang-check-stmt.cpp
index c13df183f6..6ff89df268 100644
--- a/source/slang/slang-check-stmt.cpp
+++ b/source/slang/slang-check-stmt.cpp
@@ -65,6 +65,35 @@ void SemanticsStmtVisitor::visitBlockStmt(BlockStmt* stmt)
         {
             if (as<AggTypeDeclBase>(decl))
                 ensureAllDeclsRec(decl, DeclCheckState::DefinitionChecked);
+
+            // Consider this code:
+            // ```
+            // {
+            //       int a = 5 + b; // should error.
+            //       int b = 3;
+            // }
+            //
+            // ```
+            // In order to detect the error trying to use `b` before it's declared within
+            // a block, our lookup logic contains a condition that ignores a decl if it hasn't
+            // been checked yet.
+            // See _lookUpDirectAndTransparentMembers(), for a call to _isDeclUnchecked().
+            // There, we will ignore unchecked decls during lookup, and as we encounter
+            // DeclStmts, we will then mark the corresponding decl as Checked, which will make
+            // the decl discoverable again by lookup logic.
+            //
+            // However, during parsing we actually don't need this behavior, since they will
+            // prevent any decls from being discovered by lookup, since none of the decls will
+            // be in a checked state during parsing. To allow decls to be discoverable by lookup
+            // during parsing, we have set all decl check states to ReadyForParserLookup after it
+            // is parsed.
+            // We now reset this state to Unchecked before we start checking the block,
+            // so we can continue to use this lookup logic to report this kind of errors.
+            //
+            if (auto varDecl = as<VarDeclBase>(decl))
+            {
+                varDecl->checkState = DeclCheckState::Unchecked;
+            }
         }
     }
     checkStmt(stmt->body);
diff --git a/source/slang/slang-parser.cpp b/source/slang/slang-parser.cpp
index 0a156d8dc0..ea5348e87d 100644
--- a/source/slang/slang-parser.cpp
+++ b/source/slang/slang-parser.cpp
@@ -4862,10 +4862,15 @@ static void CompleteDecl(
 
     if (parser->semanticsVisitor && parser->getStage() == ParsingStage::Body)
     {
-        parser->semanticsVisitor->ensureDecl(
-            (Decl*)decl,
-            DeclCheckState::DefinitionChecked,
-            parser->semanticsVisitor);
+        // When we are in a deferred parsing stage for function bodies,
+        // we will mark all local var decls as `ReadyForParserLookup` so they can
+        // be returned via lookup.
+        // Note that our lookup logic will ignore all unchecked decls, but during
+        // parsing we don't want to ignore them, so we mark them as `ReadyForParserLookup`
+        // here, which is a pseudo state that is only used during parsing.
+        // Before checking the decl in semantic checking, we will mark them back as
+        // `Unchecked`.
+        decl->checkState = DeclCheckState::ReadyForParserLookup;
     }
 }
 
diff --git a/tests/bugs/gh-4150.slang b/tests/bugs/gh-4150.slang
index 031d778a9e..a6c9f7a0b7 100644
--- a/tests/bugs/gh-4150.slang
+++ b/tests/bugs/gh-4150.slang
@@ -27,15 +27,15 @@ void main(uint3 pixel_i : SV_DispatchThreadID)
     output[0] =
 #ifdef ERROR1
         // expect error: trying to specialize RWTex, which has two arguments, with only one argument.
-        // CHECK1:([[# @LINE+1]]): error 30075
+        // CHECK1-DAG:([[# @LINE+1]]): error 30075
         RWTex<float3>::get(p.image_id);
 #else
         RWTex<float, 3>::get(p.image_id);
 #endif
-    //CHECK1:([[# @LINE+1]]): error 30071
+    //CHECK1-DAG:([[# @LINE+1]]): error 30071
     static float sa1[];
 
-    //CHECK1:([[# @LINE+1]]): error 30071
+    //CHECK1-DAG:([[# @LINE+1]]): error 30071
     float sa2[];
 
     //CHECK1-NOT:([[# @LINE+1]]): error