We have enabled 'Use Repository Caches' and 'Use Repository Sharing' for our Mercurial installation. After successfully creating the bundle, sometimes the xfer.hg file will stall at 0 bytes on the slave, particularly on the first attempt. Our repository is quite large, creating a 3GB bundle, so it's particularly frustrating when it stops at this point. I worked around this by manually creating a clone in the correct place on the slaves, but found occasional problems with the incremental bundles too. For example:

Acquired slave node cache lock for node MYSLAVE.
[579515DBB228E33DCBB4F032DF0E45CC959C39DD-omgsvr60-SWTest] $ hg --config auth.jenkins.prefix=* --config ******** --config ******** --config "auth.jenkins.schemes=http https" heads --template

\n --topo --closed
[579515DBB228E33DCBB4F032DF0E45CC959C39DD-myserver-myuser] $ hg --config auth.jenkins.prefix=* --config ******** --config ******** --config "auth.jenkins.schemes=http https" bundle --base c5a2e7c076fbfd7a32ad3cd0b73388c481d3fd27 --base 8d182a69f679fd2fb72f7d6b97503681cfe84052 --base ff4d5952ec39a97366e43a059c9fce7b60f5b366 --base 90c38b598baca76ed6a6eb3f8c270f4c47852ed7 --base d0ef3d70db45afbde1b609df3492499a774032b6 --base 78f1727e4fd2b3afc3a29abd9782483cbabd53b4 --base bbe7df97e6f2852a2f1fdbfe24896f45a7b067e7 --base 153e52c969fdf5017e15497a404d41ace9ec5d8c --base d6333be7a7917b7c46f0a4c5423eef26c032734d --base 397e7346ea5ca31c307106d4d369fd2b24d25b0f --base bbaaf47c9d646b35d3e8a1e6189c75eb194c2935 --base 8979c8d32cad2c7a45b424cdcbef14f08e0a290c --base ed2054ac69cc191dbc0985c137f35cca718eaa84 --base fd0807154ea9cf8490d3fb50170036f12a3b9ee9 --base 32f449e2d619d3f5d043cbe66b47eeaa23b78e7b --base 08af4ea4e2c351ade7430b133821b8da0aab841e --base 35149a612c00777d4c851a459271affdf05fd403 --base 6fd2d2f720b2d47bd30d2d6d0df5e0129f897a85 --base b174185b4d7c1bf922222b38332a068376d97318 --base 6d098ac5894004ab103da98d709b1bbcc045bbfe --base 538821c384d68e00a2377da5cbc708a36d3d1e29 --base 92d3469386e3ee76f254ac7f9d18fe2ef626ac17 --base 10d789a2ab40d1d4b101a30fa898b0cc4d29a971 --base d2f611447ebf4fa4d30fbeaf2de56cec06ddb4c6 --base 8c1ff350b064332591cabf8d6813f3c4842f362a --base 72b1ab5abf099df3b14c3198fd73813759b89af4 --base 37b6cb12de565f94ace2425a7f836f7f67ac16c1 --base 4e7d2805ba3b5dd78fc5caa68e56bc2c6b49af84 --base 9fa7582d7b46d73b140e1b683327dca0faa11d32 --base 07eebef65ce37ee977e11b609ea23ceeebb2f315 --base f902a366f3c010fa2fd8b2c63f46e7990adb913f --base b68a73582e262a95ea5c7799ea5d0a14be94e671 --base 20885f2d829345fc698c72fd7691b9e7158e19e4 --base 961482b343bf29e48da3db8bf76ac233cb255098 --base b9c2fe2e5b34e096edef7480f7c8807031298cb9 --base 58cb5e3288de308cec831c883d326e00405fac44 --base 5d1fa0946168dd9409a5449c52e0c43049511ea7 --base 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--base fe75dbfc2602cbc71a6faaa8270306f10c382ad6 --base c2c4befe7e6ca1a17fea25e5cb92f0fa64ea0147 --base b5b00b1234e178d22212fefb637f492814dd92a2 --base cb4859cb96438410cf8323cee4388690c9e0733f --base 0b2e89de78f358b38b9542c8b4163bd4198e8395 --base 410e802195360d6885c77a75835f2c8172e23431 --base b538bc7fb11595e7b722b13e0014df2414556bdf xfer-MYSLAVE.hg
4 changesets found
[579515DBB228E33DCBB4F032DF0E45CC959C39DD-myserver-myuser] $ hg --config auth.jenkins.prefix=* --config ******** --config ******** --config "auth.jenkins.schemes=http https" unbundle xfer.hg
abort: stream ended unexpectedly (got 0 bytes, expected 6)
ERROR: Failed to unbundle E:\Hudson\hgcache\579515DBB228E33DCBB4F032DF0E45CC959C39DD-myserver-myuser\xfer.hg
Slave node cache lock released for node MYSLAVE.
ERROR: Failed to use repository cache for http://myserver
java.io.IOException: remote file operation failed: E:\Hudson\hgcache\579515DBB228E33DCBB4F032DF0E45CC959C39DD-myserver-myuser\xfer.hg at hudson.remoting.Channel@1d6faa5:MYSLAVE
at hudson.FilePath.act(FilePath.java:918)
at hudson.FilePath.act(FilePath.java:895)
at hudson.FilePath.delete(FilePath.java:1329)
at hudson.plugins.mercurial.Cache.repositoryCache(Cache.java:216)
at hudson.plugins.mercurial.MercurialSCM.cachedSource(MercurialSCM.java:821)
at hudson.plugins.mercurial.MercurialSCM.pull(MercurialSCM.java:391)
at hudson.plugins.mercurial.MercurialSCM.update(MercurialSCM.java:598)
at hudson.plugins.mercurial.MercurialSCM.checkout(MercurialSCM.java:481)
at hudson.model.AbstractProject.checkout(AbstractProject.java:1252)
at hudson.model.AbstractBuild$AbstractBuildExecution.defaultCheckout(AbstractBuild.java:624)
at jenkins.scm.SCMCheckoutStrategy.checkout(SCMCheckoutStrategy.java:86)
at hudson.model.AbstractBuild$AbstractBuildExecution.run(AbstractBuild.java:530)
at hudson.model.Run.execute(Run.java:1732)
at hudson.model.FreeStyleBuild.run(FreeStyleBuild.java:43)
at hudson.model.ResourceController.execute(ResourceController.java:88)
at hudson.model.Executor.run(Executor.java:234)
Caused by: java.io.IOException: Unable to delete E:\Hudson\hgcache\579515DBB228E33DCBB4F032DF0E45CC959C39DD-myserver-myuser\xfer.hg
at hudson.Util.deleteFile(Util.java:263)
at hudson.FilePath$17.invoke(FilePath.java:1332)
at hudson.FilePath$17.invoke(FilePath.java:1329)
at hudson.FilePath$FileCallableWrapper.call(FilePath.java:2492)
at hudson.remoting.UserRequest.perform(UserRequest.java:118)
at hudson.remoting.UserRequest.perform(UserRequest.java:48)
at hudson.remoting.Request$2.run(Request.java:328)
at hudson.remoting.InterceptingExecutorService$1.call(InterceptingExecutorService.java:72)
at java.util.concurrent.FutureTask$Sync.innerRun(Unknown Source)
at java.util.concurrent.FutureTask.run(Unknown Source)
at java.util.concurrent.ThreadPoolExecutor$Worker.runTask(Unknown Source)
at java.util.concurrent.ThreadPoolExecutor$Worker.run(Unknown Source)
at hudson.remoting.Engine$1$1.run(Engine.java:63)
at java.lang.Thread.run(Unknown Source)

After this happened, the xfer.hg file was locked by Java, preventing subsequent updates until a manual restart of the slave process.

Our Java version is rather old, so I'm going to try updating that, in case there's a problem in the mechanism by which it transfers the file over the network.