diff -r 86e8187b721a -r d3691d31fc9c mercurial/filemerge.py
--- a/mercurial/filemerge.py	Thu Jun 26 13:46:34 2008 -0500
+++ b/mercurial/filemerge.py	Thu Jun 26 13:52:16 2008 -0500
@@ -132,7 +132,7 @@
     ui = repo.ui
     fd = fcd.path()
     binary = isbin(fcd) or isbin(fco) or isbin(fca)
-    symlink = fcd.islink() or fco.islink()
+    symlink = 'l' in fcd.flags() + fco.flags()
     tool, toolpath = _picktool(repo, ui, fd, binary, symlink)
     ui.debug(_("picked tool '%s' for %s (binary %s symlink %s)\n") %
                (tool, fd, binary, symlink))
@@ -180,9 +180,9 @@
     env = dict(HG_FILE=fd,
                HG_MY_NODE=short(mynode),
                HG_OTHER_NODE=str(fco.changectx()),
-               HG_MY_ISLINK=fcd.islink(),
-               HG_OTHER_ISLINK=fco.islink(),
-               HG_BASE_ISLINK=fca.islink())
+               HG_MY_ISLINK='l' in fcd.flags(),
+               HG_OTHER_ISLINK='l' in fco.flags(),
+               HG_BASE_ISLINK='l' in fca.flags())
 
     if tool == "internal:merge":
         r = simplemerge.simplemerge(a, b, c, label=['local', 'other'])