diff -r a5917346c72e -r 12dea4d998ec mercurial/hg.py
--- a/mercurial/hg.py	Fri Jan 13 02:29:38 2012 +0100
+++ b/mercurial/hg.py	Fri Jan 13 02:30:43 2012 +0100
@@ -279,7 +279,7 @@
             if self.dir_:
                 self.rmtree(self.dir_, True)
 
-    srclock = destlock = dircleanup = None
+    srclock = destwlock = destlock = dircleanup = None
     try:
         abspath = origsource
         if islocal(origsource):
@@ -325,6 +325,11 @@
             # we need to re-init the repo after manually copying the data
             # into it
             destrepo = repository(remoteui(ui, peeropts), dest)
+            # we need full recursive locking of the new repo instance
+            destwlock = destrepo.wlock()
+            if destlock:
+                destlock.release() # a little race condition - but no deadlock
+            destlock = destrepo.lock()
             srcrepo.hook('outgoing', source='clone',
                           node=node.hex(node.nullid))
         else:
@@ -401,7 +406,7 @@
 
         return srcrepo, destrepo
     finally:
-        release(srclock, destlock)
+        release(srclock, destlock, destwlock)
         if dircleanup is not None:
             dircleanup.cleanup()