How does the 3 way merge in Mercurial/Meld work?

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I'm working on a project where I have a commit that introduced a feature with major problems that weren't discovered immediately. Now I want to completely remove that revision while keeping the work following it but i'm having a hard time wrapping my head around this 3 way merge. Here is a simplified graph of my project.

o  changeset:   134:7f81764aa03a
|  tag:         tip
|  parent:      128:451d8a19edea
|  summary:     Backed out changeset 451d8a19edea
|
| @  changeset:   133:5eefa40e2a29
| |  summary:     (Change I need to keep keep)
| |
*snip 3 commits*
| o  changeset:   129:5f6182a97d40
|/   summary:     (Change I need to keep keep)
|
o  changeset:   128:451d8a19edea
|  summary:     (Change that introduced a major problem)
|
o  changeset:   127:4f26dc55455d
|  summary:     (summary doesn't matter for this question)

If I understand this correctly, r127 and r134 are exactly the same. When I hg up -C -r 133 and then run hg merge, Meld pops up with three forms of one of my files: local, base, and other. local seems to be r133 but i'm having a hard time wrapping my head around what "base" and "other" mean.

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