Reverts all work unexpectedly (bzrsvn) when file locked

I have an xls file in my local bzr repository, along with all my source code. My local repo originates from an SVN repository that I get updates from and commit to every few hours or days.

When I bind to the SVN repository and update using "bzr bind" and "bzr update", I need to make sure that the xls file is not open in Excel 2007 because if it is open (and thus locked), when I run "bzr update" all my source code will be reverted and I'll lose all my changes in every file.

I'm using Windows XP. Here is the error:

bzr ERROR: [Error 32] The process cannot access the file because it is being used by another process
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The behavior I expect when using 'bzr bind', 'bzr update' is as follows.

If I have a local repo (initially checked out from an SVN repo) at rev 200 with:
sourcefile.py, requirements.xls

and I've changed both since the last SVN update, I expect that the contents of both will be merged with the SVN repository when I bind/update:

file1 (local) <- merges into <- file1 (remote)

This is the usual behavior I've seen with bzr when the file is not locked, which works very nicely. This is also where I'll find conflicts that I have to resolve.

However, when requirements.xls is open in Excel (and thus locked by the system), when I bind/update, the error is displayed and a merge does not occur, rather a complete overwrite of the local copy occurs-so that I lose all local work because the remote files replace everything.