INCLUDES is the right way to add to CFLAGS, not DEFS.
Also there are bugs with '+=' in makefiles.
Got rid of DEFS line by moving G_LOG_DOMAIN setting into INCLUDES.
Removed redundant -I from INCLUDES.
This fixes an annoying bug where autoconf's DEFS, which includes
the important -DHAVE_CONFIG_H, was lost. (due to += weirdness)