diff --git a/Python/Product/PythonTools/PythonTools/LanguageServerClient/PythonLanguageClient.cs b/Python/Product/PythonTools/PythonTools/LanguageServerClient/PythonLanguageClient.cs
index 642f7059e0..b4f83f5179 100644
--- a/Python/Product/PythonTools/PythonTools/LanguageServerClient/PythonLanguageClient.cs
+++ b/Python/Product/PythonTools/PythonTools/LanguageServerClient/PythonLanguageClient.cs
@@ -31,6 +31,7 @@
 using Microsoft.PythonTools.Project;
 using Microsoft.PythonTools.Utility;
 using Microsoft.VisualStudio.LanguageServer.Client;
+using Microsoft.VisualStudio.LanguageServer.Protocol;
 using Microsoft.VisualStudio.Shell;
 using Microsoft.VisualStudio.Shell.Interop;
 using Microsoft.VisualStudio.Text;
@@ -455,7 +456,6 @@ private LanguageServerSettings.PythonSettings GetSettings(Uri scopeUri = null) {
 
         }
         private void OnInterpreterChanged(object sender, EventArgs e) {
-            UpdateInterpreterExcludes();
             OnSettingsChanged(sender, e);
         }
 
@@ -475,7 +475,18 @@ private void OnAnalysisComplete(object sender, EventArgs e) {
         private void OnReanalyzeChanged(object sender, EventArgs e) {
             try {
                 Debug.WriteLine("Reanalyze Changed");
-                _deferredSettingsChangedTimer.Change(_defaultSettingsDelayMS, Timeout.Infinite);
+
+                // Packages have changes, so send a workspace/didChangeWatchedFiles for the env directory.
+                this._clientContexts.ForEach(context => {
+                    var createEvent = new FileEvent();
+                    createEvent.FileChangeType = FileChangeType.Changed;
+                    createEvent.Uri = new Uri(CommonUtils.GetParent(context.InterpreterConfiguration.InterpreterPath));
+                    var didChangeParams = new DidChangeWatchedFilesParams();
+                    didChangeParams.Changes = new FileEvent[] { createEvent };
+                    _rpc.NotifyWithParameterObjectAsync(Methods.WorkspaceDidChangeWatchedFiles.Name, didChangeParams);
+                });
+               
+                
             } catch (ObjectDisposedException) {
             }
         }
@@ -524,24 +535,11 @@ private void OnWorkspaceFolderWatched(object sender, EventArgs e) {
 
         private void WatchedFilesRegistered(object sender, DidChangeWatchedFilesRegistrationOptions e) {
             // Add the file globs to our listener. It will listen to the globs
-            UpdateInterpreterExcludes();
             _fileListener?.AddPatterns(e.Watchers);
 
         }
 
-        // By default Pylance will tell us to watch everything under the workspace with pattern "**/*"
-        // we can exclude the interpreter directory because we already have package managers listening to them
-        private void UpdateInterpreterExcludes() {
-            this._clientContexts.ForEach(context => {
 
-                if (PathUtils.IsSubpathOf(context.RootPath, context.InterpreterConfiguration.InterpreterPath)) {
-                    var pattern = CommonUtils.GetRelativeFilePath(context.RootPath, context.InterpreterConfiguration.GetPrefixPath()).TrimEnd('\\') + "/**/*";
-                    var watcher = new FileSystemWatcher() { GlobPattern = pattern };
-                    this._fileListener.AddExclude(watcher);
-                }
-
-            });
-        }
 
         private void CreateClientContexts() {
             if (PythonWorkspaceContextProvider.Workspace != null) {
diff --git a/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentFactoryProvider.cs b/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentFactoryProvider.cs
index 7532bddea6..72ec9e486d 100644
--- a/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentFactoryProvider.cs
+++ b/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentFactoryProvider.cs
@@ -425,6 +425,7 @@ private static async Task<PythonInterpreterInformation> CreateEnvironmentInfo(st
             var windowsInterpreterPath = Path.Combine(prefixPath, CondaEnvironmentFactoryConstants.WindowsExecutable);
 
             if (!File.Exists(interpreterPath)) {
+                Debug.WriteLine($"[CondaEnv] Python Interpreter not found for environment '{name}' (prefix: '{prefixPath}'). Expected at: {interpreterPath}");
                 return null;
             }
 
diff --git a/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentManager.cs b/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentManager.cs
index 45c5c46c27..12a2745ac3 100644
--- a/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentManager.cs
+++ b/Python/Product/VSInterpreters/Interpreter/CondaEnvironmentManager.cs
@@ -60,6 +60,7 @@ public static CondaEnvironmentManager Create(string condaPath) {
             return new CondaEnvironmentManager(condaPath);
         }
 
+        // Creates a new conda environment with the given name or path, installing the specified packages. 'conda create -n name python pkg1 pkg2 ... -y'
         public async Task<bool> CreateAsync(string newEnvNameOrPath, IEnumerable<PackageSpec> packageSpecs, ICondaEnvironmentManagerUI ui, CancellationToken ct) {
             bool success = false;
             using (await _working.LockAsync(ct)) {
@@ -67,8 +68,8 @@ public async Task<bool> CreateAsync(string newEnvNameOrPath, IEnumerable<Package
                     "create",
                     IsAbsolutePath(newEnvNameOrPath) ? "-p" : "-n",
                     ProcessOutput.QuoteSingleArgument(newEnvNameOrPath),
-                    "-y",
-                }.Union(packageSpecs.Select(s => s.FullSpec));
+                    "python",                    
+                }.Union(packageSpecs.Select(s => s.FullSpec)).Append("-y");
 
                 var operation = "conda " + string.Join(" ", args);