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Some more information:
It has picked up that I have mercurial installed:
[gw56@ws050 Python-2.7.2_cci]$ cat config.log | grep HG
ac_cv_prog_HAS_HG=found
HAS_HG='found'
HGBRANCH='hg id -b $(srcdir)'
HGTAG='hg id -t $(srcdir)'
HGVERSION='hg id -i $(srcdir)'
however it happens to be rather an old version:
[gw56@ws050 Python-2.7.2_cci]$ hg --version
Mercurial Distributed SCM (version 0.9.3)
Copyright (C) 2005, 2006 Matt Mackall <mpm@selenic.com>
This is free software; see the source for copying conditions. There is NO
warranty; not even for MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.
so does not recognise the command-line options that you are using.