Fix 3-way-merge of original parent, workdir and new parent. The dirstate has to match what is in the repository (what would be checked out with 'hg update -C'), because the resulting file may be identical to the new parent, or it may be completely different. Previously the dirstate wasn't updated, so if you changed the file to look like the original parent, it might be considered unmodified relative to the new parent.

#!/bin/sh

mkdir test
cd test
echo foo>foo
hg init
hg addremove
hg commit -m 1
hg verify
hg serve -p 20059 > /dev/null &
sleep 1 # wait for server to be started
cd ..

hg clone http://localhost:20059/ copy
cd copy
hg verify
hg co
cat foo
hg manifest
hg pull

kill $!