Since the mercurial version on the official repos is a bit old, I tried installing fr om rpmforge and fr om source, but neither of them work when executing hg with a normal user. If I execute with root, there will be no problem, hg executes as expected.
When I execute "hg upd ate" with a normal user I will get a "abort: out of memory". I even se tup the LVE for 16GB of ram and 50% CPU, and this won't work. So It looks like there is a extra feature thats lim iting mercurial?
# uname -a
2.6.32-320.4.1.lve1.1.4.el6.x86_64 #1 SMP Wed Mar 7 06:32:27 EST 2012 x86_64 x86_64 x86_64 GNU/Linux
If you are running it as root -- I am pretty sure it is not due to LVE
most likely it is either data seg size (-d) or max memory size (-m) or virtual memory (-v)
I would reset those to unlimited, and try again.