There's pretty broad consensus that we'd like to do Rust and not C for future extension work, but the current plan is that a pure-Python hg will also be something we support. The "rust binary that embeds Python" approach looks like a straightforward win on Windows, where we have a native .exe that embeds Python anyway. I'm not sure if that'll make sense on non-Windows, but we'll see.
I've done some poking around with milksnake, which seems extremely promising for writing native speedups.
I've done some poking around with milksnake, which seems extremely promising for writing native speedups.