diff -r 3f93f6838639 -r fb66a7d3f28f mercurial/demandimport.py
--- a/mercurial/demandimport.py	Wed Aug 05 14:58:30 2009 +0200
+++ b/mercurial/demandimport.py	Wed Aug 05 17:19:37 2009 +0200
@@ -81,7 +81,10 @@
 def _demandimport(name, globals=None, locals=None, fromlist=None, level=None):
     if not locals or name in ignore or fromlist == ('*',):
         # these cases we can't really delay
-        return _origimport(name, globals, locals, fromlist)
+        if level is None:
+            return _origimport(name, globals, locals, fromlist)
+        else:
+            return _origimport(name, globals, locals, fromlist, level)
     elif not fromlist:
         # import a [as b]
         if '.' in name: # a.b