This is a follow up to a previous post I made, which can be found here.
The good news is that there is now a Mercurial Extension to take all the donkey work out of fixing those pesky case folding collisions.
Visit this page on the Mercurial Wiki to find out more:
http://mercurial.selenic.com/wiki/CaseFoldExtension
A massive thanks to the author of this extension!