Comment 2 for bug 1591748

The hg that you found in /usr/local/bin/ was not installed by apt or dpkg, you have installed it manually by downloading the sources and running "make install". Just by renaming it you are not getting rid of your local installation of mercurial. Have a look at /usr/local/lib/python2.7/dist-packages , you will probably find mercurial and hgext directories there. Those are likely to be the ones your /usr/bin/hg is importing and why it's getting so confused.

Try getting rid of what you installed in /usr/local (specially in /usr/local/lib/python2.7/dist-packages/mercurial* and hgext*) and use only the packages provided by the distribution.