  In 1981 J. Wahl described smoothings of surface quotient singularities with
no vanishing cycles. Given a smoothing of a projective surface X of this type,
we construct an associated exceptional vector bundle on the nearby fiber Y in
the case H^{2,0}(Y)=H^1(Y)=0. If Y is the projective plane we show that our
construction establishes a bijective correspondence between the possible
degenerate surfaces X and exceptional bundles on Y modulo dualizing and
tensoring by line bundles. If Y is of general type then our construction
establishes a connection between components of the boundary of the moduli space
of surfaces deformation equivalent to Y and exceptional bundles on Y.
