Darcs can't detect local drive Z: as drive.
(Z: is netbios mounted share)
My command line:

PS E:\dev\_darcs\prefs> darcs -v
2.1.2 (+ 342 patches)
PS E:\dev\_darcs\prefs> cat defaultrepo
Z://darcs-repos/herabora/
PS E:\dev\_darcs\prefs> darcs pull -a

darcs failed:  Not a repository: ../../../../Z:/darcs-repos/herabora ((scp) 
failed to fetch: ../../../../Z:/darcs-repos/herabora/_darcs/invent
ory)
PS E:\dev\_darcs\prefs>

Just for completeness, this is from IRC:

09:29  C-Keen> and the repo is initially a darcs2 repo format?
09:29  me-so-stupid> yep
09:29  C-Keen> and you are pulling from a darcs2 repo?
09:29  me-so-stupid> yep

The following patch updated the status of issue1249 to be resolved:

* resolve issue1249: remove makeRelative usage in defaultrepo 
Ignore-this: 2670c16531c03c93b7d82111c28d51e4

makeRelative causes issues with Windows absolute paths
e.g. c:\something. It is used only in defaultrepo, and
it appears to be a leftover from previous path management.
This patch removes it, making defaultrepo management more
like "regular" command line repo management.
Note that the makeRelative code is not removed in this
patch, just the usage.