Comment 4 for bug 667443

There is something funny happening here. If I create a standalone repo from scratch the command seems to work fine. I tried this for pack-0.92 and 1.14. Is there something different about your repo. Is it shared? Maybe imported from svn?
I can reproduce this on bzr-diff-revid. The format for bzr-diff-revid is:

Format:
       control: Meta directory format 1
  working tree: Working tree format 6
        branch: Branch format 6
    repository: Packs containing knits without subtree support

The format when I init with pack-0.92 is:

Format:
       control: Meta directory format 1
  working tree: Working tree format 4
        branch: Branch format 6
    repository: Packs containing knits without subtree support

So there is a minor difference in working tree format.

Log of test done with 1.14 and pack-0.92:

[tmp]% bzr init grepfail --format=1.14
Created a standalone tree (format: 1.14)
[tmp]% cd grepfail
[grepfail]% touch abc
[grepfail]% bzr add
adding abc
[grepfail]% echo "hello" > abc
[grepfail]% bzr ci -m "added abc"
Committing to: /home/parthm/tmp/grepfail/
added abc
Committed revision 1.
[grepfail]% echo "world" >> abc
[grepfail]% bzr ci -m "added world"
Committing to: /home/parthm/tmp/grepfail/
modified abc
Committed revision 2.
[grepfail]% bzr grep -r -1 hello
abc~2:hello
[grepfail]% cd ..

[tmp]% bzr init grepfail-92 --format=pack-0.92
Created a standalone tree (format: pack-0.92)
[tmp]% cd grepfail-92
[grepfail-92]% echo hello > abc
[grepfail-92]% bzr add
adding abc
[grepfail-92]% bzr ci -m "added abc"
Committing to: /home/parthm/tmp/grepfail-92/
added abc
Committed revision 1.
[grepfail-92]% echo world >> abc
[grepfail-92]% bzr ci -m "added world"
Committing to: /home/parthm/tmp/grepfail-92/
modified abc
Committed revision 2.
[grepfail-92]% bzr grep -r -1 hello
abc~2:hello
[grepfail-92]%