When you try to configure the hg executable, it can fail with:

Bad hg executable: No version string found in output of /usr/bin/hg version

FishEye uses "hg version" to retrieve the Mercurial/Hg version.
Hg can report version in OS's locale.

E.g. English:

Mercurial Distributed SCM (version 1.8.4+20110601)

Italian:

Mercurial SCM Distribuito (versione 1.8.4+20110601)

FishEye uses pattern matching to extract version:

HG_VERSION_PATTERN_STRING = "version\\s([\\d\\.\\+]+)"

This fails with some non-English locales.

Workaround

• Changing system's location should work (observed in Windows).