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A vendors B and C, but C vendors D and E. According to this proposal do you lay out the files like this: (A (vendor (B C D E)))?

Edit: I guess HN tree markup is not working :)

Yes. That would work. However, I also believe this will work: (A (vendor (B (C (vendor (D E)))))).

and if you have both: (A (vendor (B (C (vendor (D E))) D E)))

C would pick D E in its C/vendor before D E in A/vendor before D E in $GOPATH/src

ps. I have edited these comments about 5 times to get the parentheses right. :)