Odd problem with planner choosing seq scan

I have two tables, staff (530 rows) and location (2.5 million rows). I
do a query that joins the two together, as so:

SELECT s.ProprietorId, l.LocationId, s.RoleId
FROM Location l
INNER JOIN (
SELECT *
FROM Staff
) s ON l.ProprietorId = s.ProprietorId
WHERE s.UserId = 123456
AND s.LocationId IS NULL

Ignore the fact that it's a subquery -- the query plan is the same if
its a straight JOIN, and I'm going to use the subquery to demonstrate
something interesting.

Anyways, this takes ~45 seconds to run, and returns 525 rows (just about
1 per record in the Staff table; 5 records are not for that user are so
are excluded). The EXPLAIN is:

Nested Loop (cost=243.50..34315.32 rows=10286 width=12)
-> Subquery Scan s (cost=0.00..21.93 rows=1 width=8)
Filter: ((userid = 123456) AND (locationid IS NULL))
-> Limit (cost=0.00..15.30 rows=530 width=102)
-> Seq Scan on staff (cost=0.00..15.30 rows=530 width=102)
-> Bitmap Heap Scan on "location" l (cost=243.50..34133.68
rows=12777 width=8)
Recheck Cond: (s.proprietorid = l.proprietorid)
-> Bitmap Index Scan on idx_location_proprietorid_locationid
(cost=0.00..240.30 rows=12777 width=0)
Index Cond: (s.proprietorid = l.proprietorid)

The EXPLAIN ANALYZE is:

Hash Join (cost=23.16..129297.25 rows=2022281 width=12) (actual
time=62.315..48632.406 rows=525 loops=1)
Hash Cond: (l.proprietorid = staff.proprietorid)
-> Seq Scan on "location" l (cost=0.00..101337.11 rows=2057111
width=8) (actual time=0.056..44504.431 rows=2057111 loops=1)
-> Hash (cost=16.63..16.63 rows=523 width=8) (actual
time=46.411..46.411 rows=525 loops=1)
-> Seq Scan on staff (cost=0.00..16.63 rows=523 width=8)
(actual time=0.022..45.428 rows=525 loops=1)
Filter: ((userid = 123456) AND (locationid IS NULL))
Total runtime: 48676.282 ms

Now, the interesting thing is, if I add "LIMIT 5000" into that inner
subquery on the staff table, it no longer seq scans location, and the
whole thing runs in less than a second.

SELECT s.ProprietorId, l.LocationId, s.RoleId
FROM Location l
INNER JOIN (
SELECT *
FROM Staff
LIMIT 5000 -- Only change; remember, this table -- only has
530 rows
) s ON l.ProprietorId = s.ProprietorId
WHERE s.UserId = 123456
AND s.LocationId IS NULL

EXPLAIN:

Nested Loop (cost=243.50..34315.32 rows=10286 width=12)
-> Subquery Scan s (cost=0.00..21.93 rows=1 width=8)
Filter: ((userid = 123456) AND (locationid IS NULL))
-> Limit (cost=0.00..15.30 rows=530 width=102)
-> Seq Scan on staff (cost=0.00..15.30 rows=530 width=102)
-> Bitmap Heap Scan on "location" l (cost=243.50..34133.68
rows=12777 width=8)
Recheck Cond: (s.proprietorid = l.proprietorid)
-> Bitmap Index Scan on idx_location_proprietorid_locationid
(cost=0.00..240.30 rows=12777 width=0)
Index Cond: (s.proprietorid = l.proprietorid)

EXPLAIN ANALYZE:

Nested Loop (cost=243.50..34315.32 rows=10286 width=12) (actual
time=74.097..569.372 rows=525 loops=1)
-> Subquery Scan s (cost=0.00..21.93 rows=1 width=8) (actual
time=16.452..21.092 rows=525 loops=1)
Filter: ((userid = 123456) AND (locationid IS NULL))
-> Limit (cost=0.00..15.30 rows=530 width=102) (actual
time=16.434..19.128 rows=530 loops=1)
-> Seq Scan on staff (cost=0.00..15.30 rows=530
width=102) (actual time=16.429..17.545 rows=530 loops=1)
-> Bitmap Heap Scan on "location" l (cost=243.50..34133.68
rows=12777 width=8) (actual time=1.027..1.029 rows=1 loops=525)
Recheck Cond: (s.proprietorid = l.proprietorid)
-> Bitmap Index Scan on idx_location_proprietorid_locationid
(cost=0.00..240.30 rows=12777 width=0) (actual time=0.151..0.151 rows=1
loops=525)
Index Cond: (s.proprietorid = l.proprietorid)
Total runtime: 570.868 ms

This confuses me. As far as I can tell, the EXPLAIN output is the same
regardless of whether LIMIT 5000 is in there or not. However, I don't
know why a) the EXPLAIN ANALYZE plan is different in the first case,
where there is no LIMIT 5000, or b) why adding a LIMIT 5000 onto a table
would change anything when the table has only 530 rows in it.
Furthermore, I can repeat this experiment over and over, so I know that
its not caching. Removing the LIMIT 5000 returns performance to > 45
seconds.

I've ANALYZEd both tables, so I'm relatively certain statistics are up
to date. This is test data, so there are no ongoing
inserts/updates/deletes -- only selects.

I'd really prefer this query run in < 1 second rather than > 45, but I'd
really like to do that without having hacks like adding in pointless
LIMIT clauses.

Any help would be much appreciated.

--Colin McGuigan