Here's my story:

W:\ida\plugins\TePe>darcs diff --diff-command "WinMergeU.exe %1 %2"
Running command 'WinMergeU.exe pluginsold-TePe/ pluginsnew-TePe/'
darcs: darcs84bdba: removeFile: permission denied (Permission denied)

WinMerge never starts.

I have attached a stacktrace of the call that creates the file. I'll attach a
file with the operations performed on the file as captured by Process Monitor.