diff --git a/server/filestore.go b/server/filestore.go
index 33229c54..62439de7 100644
--- a/server/filestore.go
+++ b/server/filestore.go
@@ -463,6 +463,7 @@ func (mb *msgBlock) rebuildState() (*LostStreamData, error) {
 	// Clear state we need to rebuild.
 	mb.msgs, mb.bytes = 0, 0
 	mb.last.seq, mb.last.ts = 0, 0
+	mb.first.seq, mb.first.ts = 0, 0
 
 	buf, err := ioutil.ReadFile(mb.mfn)
 	if err != nil {
@@ -514,6 +515,8 @@ func (mb *msgBlock) rebuildState() (*LostStreamData, error) {
 		return &ld
 	}
 
+	firstNeedsSet := true
+
 	for index, lbuf := uint32(0), uint32(len(buf)); index < lbuf; {
 		if index+msgHdrSize >= lbuf {
 			truncate(index)
@@ -542,12 +545,6 @@ func (mb *msgBlock) rebuildState() (*LostStreamData, error) {
 		seq := le.Uint64(hdr[4:])
 		ts := int64(le.Uint64(hdr[12:]))
 
-		// If the first seq we read does not match our indexed first seq, reset.
-		if index == 0 && seq > mb.first.seq {
-			mb.first.seq = seq
-			mb.first.ts = ts
-		}
-
 		// This is an old erased message, or a new one that we can track.
 		if seq == 0 || seq&ebit != 0 || seq < mb.first.seq {
 			seq = seq &^ ebit
@@ -582,7 +579,8 @@ func (mb *msgBlock) rebuildState() (*LostStreamData, error) {
 				copy(mb.lchk[0:], checksum)
 			}
 
-			if mb.first.seq == 0 {
+			if firstNeedsSet {
+				firstNeedsSet = false
 				mb.first.seq = seq
 				mb.first.ts = ts
 			}