diff --git a/lib/src/model/package.dart b/lib/src/model/package.dart
index 1c23de3c2a..c09be930a0 100644
--- a/lib/src/model/package.dart
+++ b/lib/src/model/package.dart
@@ -152,9 +152,22 @@ class Package extends LibraryContainer
   /// was not excluded on the command line.
   bool get isLocal {
     if (_isLocal == null) {
-      _isLocal = (packageMeta == packageGraph.packageMeta ||
-              packageGraph.hasEmbedderSdk && packageMeta.isSdk ||
-              packageGraph.config.autoIncludeDependencies) &&
+      _isLocal = (
+              // Document as local if this is the default package.
+              packageMeta == packageGraph.packageMeta ||
+                  // Assume we want to document an embedded SDK as local if
+                  // it has libraries defined in the default package.
+                  // TODO(jcollins-g): Handle case where embedder SDKs can be
+                  // assembled from multiple locations?
+                  packageGraph.hasEmbedderSdk &&
+                      packageMeta.isSdk &&
+                      libraries.any((l) => path.isWithin(
+                          packageGraph.packageMeta.dir.path,
+                          (l.element.source.fullName))) ||
+                  // autoIncludeDependencies means everything is local.
+                  packageGraph.config.autoIncludeDependencies) &&
+          // Regardless of the above rules, do not document as local if
+          // we excluded this package by name.
           !packageGraph.config.isPackageExcluded(name);
     }
     return _isLocal;
diff --git a/lib/src/model/package_builder.dart b/lib/src/model/package_builder.dart
index e3da440664..2862a55081 100644
--- a/lib/src/model/package_builder.dart
+++ b/lib/src/model/package_builder.dart
@@ -52,9 +52,9 @@ class PackageBuilder {
     return newGraph;
   }
 
-  DartSdk _sdk;
+  FolderBasedDartSdk _sdk;
 
-  DartSdk get sdk {
+  FolderBasedDartSdk get sdk {
     if (_sdk == null) {
       _sdk = FolderBasedDartSdk(PhysicalResourceProvider.INSTANCE,
           PhysicalResourceProvider.INSTANCE.getFolder(config.sdkDir));