I have spotted the biggest bottleneck in "bdiff.c". Actually it was pretty easy to find after I recompiled the python interpreter and mercurial for profiling. In "bdiff.c" function "equatelines" allocates the minimum hash table size, which can lead to tons of collisions. I introduced an "overcommit" factor of 16, this is, I allocate 16 times more memory than the minimum value. Overcommiting 128 times does not improve the performance over the 16-times case.

#!/bin/sh

hg init a
echo a > a/a
hg --cwd a ci -Ama

hg clone a c

hg clone a b
echo b >> b/a
hg --cwd b ci -mb

echo % push should push to default when default-push not set
hg --cwd b push | sed 's/pushing to.*/pushing/'

echo % push should push to default-push when set
echo 'default-push = ../c' >> b/.hg/hgrc
hg --cwd b push | sed 's/pushing to.*/pushing/'