thanks John. I did install the 2.4 beta (bzr-2.4b1-setup.exe) and there is no change in behaviour.
there is a lock directory at `%appdata%\bazaar\2.0\lock` but it is empty. I kept that dir open in Windows Explorer as I ran 'bzr pull' to see if a file showed briefly during execution, but no.

Here is the latest traceback:
{{{
B:\apps\leo-editor>bzr pull
bzr: ERROR: exceptions.UnboundLocalError: local variable 'lock_url' referenced before assignment

Traceback (most recent call last):
  File "bzrlib\commands.pyo", line 926, in exception_to_return_code
  File "bzrlib\commands.pyo", line 1126, in run_bzr
  File "bzrlib\commands.pyo", line 691, in run_argv_aliases
  File "bzrlib\commands.pyo", line 713, in run
  File "bzrlib\cleanup.pyo", line 135, in run_simple
  File "bzrlib\cleanup.pyo", line 165, in _do_with_cleanups
  File "bzrlib\builtins.pyo", line 1005, in run
  File "bzrlib\workingtree_4.pyo", line 629, in lock_write
  File "bzrlib\branch.pyo", line 2448, in lock_write
  File "bzrlib\lockable_files.pyo", line 187, in lock_write
  File "bzrlib\lockdir.pyo", line 657, in lock_write
  File "bzrlib\lockdir.pyo", line 625, in wait_lock
UnboundLocalError: local variable 'lock_url' referenced before assignment

bzr 2.4b1 on python 2.6.6 (Windows-7-6.1.7600)
arguments: ['bzr', 'pull']
encoding: 'cp1252', fsenc: 'mbcs', lang: None
plugins:
bzrtools 2.4.0
  Various useful commands for working with bzr.
   C:\Program Files (x86)\Bazaar\plugins\bzrtools

colo 0.3.0dev
  Work with colocated branches using current technology.
   C:\Program Files (x86)\Bazaar\plugins\colo

explorer 1.1.3dev
  Version Control for Human Beings.
   C:\Program Files (x86)\Bazaar\plugins\explorer

fastimport 0.11.0dev
  FastImport Plugin
   C:\Program Files (x86)\Bazaar\plugins\fastimport

launchpad 2.4b1
  Launchpad.net integration plugin for Bazaar.
   C:\Program Files (x86)\Bazaar\plugins\launchpad

loom 2.2.1dev
  Loom is a bzr plugin which adds new commands to manage a loom of patches.
   C:\Program Files (x86)\Bazaar\plugins\loom

netrc_credential_store 2.4b1
  Use ~/.netrc as a credential store for authentication.conf.
   C:\Program Files (x86)\Bazaar\plugins\netrc_credential_store

news_merge 2.4b1
  Merge hook for bzr's NEWS file.
   C:\Program Files (x86)\Bazaar\plugins\news_merge

pipeline 1.1.0
  Manage a series of branches as a pipeline.
   C:\Program Files (x86)\Bazaar\plugins\pipeline

qbzr 0.21.0dev
  QBzr - Qt-based frontend for Bazaar
   C:\Program Files (x86)\Bazaar\plugins\qbzr

rewrite 0.7.0dev
  Rebase support.
   C:\Program Files (x86)\Bazaar\plugins\rewrite

svn 1.1.0dev
  Support for Subversion branches
   C:\Program Files (x86)\Bazaar\plugins\svn

upload 1.0.1dev
  Upload a working tree, incrementally.
   C:\Program Files (x86)\Bazaar\plugins\upload

xmloutput 0.8.7
  This plugin adds an option (--xml) to log and provides an xml version of some
builtin commands.
   C:\Program Files (x86)\Bazaar\plugins\xmloutput



*** Bazaar has encountered an internal error.  This probably indicates a
    bug in Bazaar.  You can help us fix it by filing a bug report at
        https://bugs.launchpad.net/bzr/+filebug
    including this traceback and a description of the problem.
}}}