Symptoms

An error message appears, "Patching Mercurial failed."

Cause

You'll get this message when trying to use the system Mercurial, if you're using the recently released Mercurial 1.9.

Resolution

Mercurial 1.9 isn't supported yet. There are 2 reasons:

1. Mercurial 1.9 breaks a number of extensions, including hgattic which SourceTree relies on.
2. Mercurial up to 1.9.2 has a bug on Mac OS X with calling merge tools which can cause a segfault in Python on particularly large merges.

Once these issues are resolved, the 'use system Mercurial' option will be updated to work with 1.9 too. For updates, set a watch on this page by logging in and watching the page.