This bug still appears in 0.95. It's problematic for Windows users because the 
Windows binary distribution can't be patched (and somewhat ironic since this is 
the only platform it's a problem for).

One workaround is to take the result of 'hg diff' and run it through the 
following Perl one-liner.

perl -pe "s/\015//" import.patch > import.corrected.patch

Because we're looking for 0D 0D 0A sequences, it would be preferable to use a 
sed sequence like s/\015\015\012/\015\012/, but stdio handling appears to be 
getting in the way; that sed pattern never matches for me. 

If anyone comes up with a better solution, please post it here.