Unexpected new head created

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I am working with Hg and TortoiseHg on a project and pushing every couple of days to a remote repo on Bitbucket. When I tried to push changes today, I got an error saying that I was trying to create a new head. I thought this was odd since I am definitely the only person working on the project and I work from one PC.

I pulled to see what was going on on the remote repo and after pulling the local repo tree looks like so:

Local Repo

At the bitbucket end the repo looks like this:

Remote Repo

Can someone help me understand why I got two heads if I'm the only one working on the project and why Hg is not recognising that Rev.40 and Rev.36 are the same revision?

How do I fix this now? If I strip 40 locally, what will happen when I try to push changes to the remote repo? Will it strip the revision at the remote repo too?

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