Drush was unable to get the bzr status

Ah, movement in the issue!
@sreynen, please point me to the correct line in bzr.inc.
I may be lazy, but it would help :)

So here is what I found: If you encounter this error, you can circumvent it by outcommenting some code in /commands/pm/version_control/bzr.inc inside the drush folder.
This is at your own risk since the bzr.inc file aims at preventing you to lose changes in a Bazaar Repository that you have made and not yet committed.

I outcommented both occurrences of the else statement that holds the error message you see. I guess the first one would be enough, but it works like this. Here the complete code up to the latest outcommented bit with the outcommented parts:

class drush_version_control_bzr implements drush_version_control {

  /**
   * Implementation of pre_update().
   *
   * Check that the project or drupal core directory looks clean
   */
  public function pre_update(&$project, $items_to_test = array()) {
    // Bazaar needs a list of items to test within the given project.
    // If $items_to_test is empty we need to force it to test the project
    // directory itself --once we've cd'ed to it.
    if (empty($items_to_test)) {
      $items_to_test = array('.' => '.');
    }
    $args = array_keys($items_to_test);
    array_unshift($args, 'bzr status --short' . str_repeat(' %s', count($args)));
    array_unshift($args, $project['full_project_path']);
    if (call_user_func_array('drush_shell_cd_and_exec', $args)) {
      $output = preg_grep('/^[\sRCP][\sNDKM][\s\*]/', drush_shell_exec_output());
      if (!empty($output)) {
        return drush_set_error('DRUSH_PM_BZR_LOCAL_CHANGES', dt("The Bazaar working copy at !path appears to have uncommitted changes (see below). Please commit or revert these changes before continuing:\n!output", array('!path' => $project['full_project_path'], '!output' => implode("\n", $output))));
      }
    }
    // else {
    //   return drush_set_error('DRUSH_PM_BZR_NOT_FOUND', dt("Drush was unable to get the bzr status on !path. Check that you have Bazaar \ninstalled and that this directory is a Bazaar working copy.\nThe specific errors are below:\n!errors", array('!path' => $project['full_project_path'], '!errors' => implode("\n", drush_shell_exec_output()))));
    // }
    return TRUE;
  }

  /**
   * Implementation of rollback().
   */
  public function rollback($project) {
    if (drush_shell_exec('bzr revert %s', $project['full_project_path'])) {
      $output = drush_shell_exec_output();
      if (!empty($output)) {
        return drush_set_error('DRUSH_PM_BZR_LOCAL_CHANGES', dt("The Bazaar working copy at !path appears to have uncommitted changes (see below). Please commit or revert these changes before continuing:\n!output", array('!path' => $project['full_project_path'], '!output' => implode("\n", $output))));
      }
    }
    // else {
    //   return drush_set_error('DRUSH_PM_BZR_NOT_FOUND', dt("Drush was unable to get the Bazaar status on !path. Check that you have Bazaar \ninstalled and that this directory is a Bazaar working copy.\nThe specific errors are below:\n!errors", array('!path' => $project['full_project_path'], '!errors' => implode("\n", drush_shell_exec_output()))));
    // }
  }