I just upgraded to version 2.0 of TortoiseHg the other day and started running into these errors when I went to clone repos out of bitbucket using SSH:
remote: The system cannot find the path specified. abort: no suitable response from remote hg!
Turns out that on 64-bit Windows machines the install directory changed from C:\Program Files (x86)\TortoiseHg to C:\Program Files\TortoiseHg. As a result, the location of TortoisePlink has changed and needs to be updated in your mercurial.ini file (located in your %USERPROFILE% directory) as such:
ssh = "C:\Program Files\TortoiseHg\TortoisePlink.exe" -ssh -2 -batch -C
A huge thank you goes to Igal Tabachnik for posting a solution to this here.
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