This won't fix the bug in itself, but as a workaround, if you edit /usr/local/bin/bzr and change the first line to use python 2.6, the problem seems to be fixed. I've been able to bind, update and commit using this.
$sudo vi /usr/local/bin/bzr
then replace
#!/usr/bin/python
by
#!/usr/bin/python2.6
So it would appear that the installer is indeed detecting and using python 2.6 instead of the default 2.7.1 on Lion.
This won't fix the bug in itself, but as a workaround, if you edit /usr/local/bin/bzr and change the first line to use python 2.6, the problem seems to be fixed. I've been able to bind, update and commit using this.
$sudo vi /usr/local/bin/bzr bin/python2. 6
then replace
#!/usr/bin/python
by
#!/usr/
So it would appear that the installer is indeed detecting and using python 2.6 instead of the default 2.7.1 on Lion.