diff -r 5528c31c629c -r 36f48c7d5944 mercurial/localrepo.py
--- a/mercurial/localrepo.py	Tue Sep 03 15:12:35 2013 -0400
+++ b/mercurial/localrepo.py	Sat Aug 31 10:16:06 2013 -0700
@@ -1557,7 +1557,7 @@
             for f in modified:
                 if ctx2.flags(f) == 'l':
                     d = ctx2[f].data()
-                    if len(d) >= 1024 or '\n' in d or util.binary(d):
+                    if d == '' or len(d) >= 1024 or '\n' in d or util.binary(d):
                         self.ui.debug('ignoring suspect symlink placeholder'
                                       ' "%s"\n' % f)
                         continue