Index: view_alias.module
===================================================================
--- view_alias.module	(revision 546)
+++ view_alias.module	(working copy)
@@ -48,6 +48,10 @@
 
       foreach ($terms as $term) {
         $clean_term_name = pathauto_cleanstring($term->name);
+        if (variable_get('pathauto_case', 1)) {
+          $clean_term_name = drupal_strtolower($clean_term_name);
+        }
+
         $pos = strpos($alias->path, '%');
         $alias_token;
         $alias_actual;