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.