diff --git a/beets/library.py b/beets/library.py
index 139cdfec0f..d474ed8ab3 100644
--- a/beets/library.py
+++ b/beets/library.py
@@ -715,6 +715,71 @@ def move(self, copy=False, link=False, basedir=None, with_album=True):
 
     # Templating.
 
+    def _legalize_partial(self, path, fragment, replacements):
+        """ Perform a partial legalization of the path (ie. a single
+        sanitization and truncation). Outputs unicode if fragment is set,
+        otherwise bytes.
+        """
+
+        # Truncate components and remove forbidden characters.
+        path = util.sanitize_path(path, replacements)
+
+        # Encode for the filesystem.
+        if not fragment:
+            path = bytestring_path(path)
+
+        # Preserve extension.
+        _, extension = os.path.splitext(self.path)
+        if fragment:
+            # Outputting Unicode.
+            extension = extension.decode('utf8', 'ignore')
+        path += extension.lower()
+
+        # Truncate too-long components.
+        maxlen = beets.config['max_filename_length'].get(int)
+        if not maxlen:
+            # When zero, try to determine from filesystem.
+            maxlen = util.max_filename_length(self._db.directory)
+        path = util.truncate_path(path, maxlen)
+
+        return path
+
+    def _legalize_path(self, path, fragment):
+        """ Perform several iterations of _legalize_partial, to generate a
+        stable, optimal output path. This is necessary for cases where
+        truncation produces unclean paths (eg. trailing space).
+        """
+
+        # Create a list of path candidates
+        path_candidates = [b'']
+
+        replacements = self._db.replacements
+
+        # Perform an initial pass
+        path = self._legalize_partial(path, fragment, replacements)
+        while path != path_candidates[-1]:
+            # This will keep sanitizing the path until it's stable, or an
+            # infinite loop appears
+            while path not in path_candidates:
+                path_candidates.append(path)
+                # Convert back to Unicode with extension removed
+                print(util.displayable_path(path))
+                path = os.path.splitext(util.displayable_path(path))[0]
+
+                # Run next pass
+                path = self._legalize_partial(path, fragment, replacements)
+
+            # If an infinite loop occurred, adjust replacements to avoid it
+            if path != path_candidates[-1]:
+                replacements = dict((k, u'_') for k, v in replacements)
+
+                # If there's a rule to match a single underscore, set the
+                # target to a blank string.
+                if '_' in replacements:
+                    replacements['_'] = ''
+
+        return path
+
     def destination(self, fragment=False, basedir=None, platform=None,
                     path_formats=None):
         """Returns the path in the library directory designated for the
@@ -763,26 +828,7 @@ def destination(self, fragment=False, basedir=None, platform=None,
         if beets.config['asciify_paths']:
             subpath = unidecode(subpath)
 
-        # Truncate components and remove forbidden characters.
-        subpath = util.sanitize_path(subpath, self._db.replacements)
-
-        # Encode for the filesystem.
-        if not fragment:
-            subpath = bytestring_path(subpath)
-
-        # Preserve extension.
-        _, extension = os.path.splitext(self.path)
-        if fragment:
-            # Outputting Unicode.
-            extension = extension.decode('utf8', 'ignore')
-        subpath += extension.lower()
-
-        # Truncate too-long components.
-        maxlen = beets.config['max_filename_length'].get(int)
-        if not maxlen:
-            # When zero, try to determine from filesystem.
-            maxlen = util.max_filename_length(self._db.directory)
-        subpath = util.truncate_path(subpath, maxlen)
+        subpath = self._legalize_path(subpath, fragment)
 
         if fragment:
             return subpath
diff --git a/test/test_library.py b/test/test_library.py
index c3807637ef..46a6ef1e95 100644
--- a/test/test_library.py
+++ b/test/test_library.py
@@ -452,7 +452,6 @@ def test_destination_with_empty_final_component(self):
         self.assertEqual(self.i.destination(),
                          np('base/one/_.mp3'))
 
-    @unittest.skip('unimplemented: #496')
     def test_truncation_does_not_conflict_with_replacement(self):
         # Use a replacement that should always replace the last X in any
         # path component with a Z.