It was related to my proxy configuration after all. Setting the
no_proxy environment variable fixed this issue for me. I see this is a
corner case but just in case someone else runs into it, this is a
summary of what I did.

If your network uses a http proxy who do not answer to local hostnames
requests and you have setup the http_proxy environment variable. In
order to get a local toolshed going, you will need to do two things.

- Add to ~/.hgrc:
no = [comma separated list of hostnames for your local toolsheds.
Note: domain regex won't work]

- Set no_proxy environment variable. For bash in Redhat/CentOS I like
adding to /etc/profile.d/
export no_proxy=[comma separated list of local domains]

Hope it helps,
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