I believe that's fixed by http://svn.apache.org/r1503318, which should be included in the 1.8.2 release.
Ternier, Ryan wrote on Tue, Jul 16, 2013 at 22:48:42 +0000: > I have a code repository of 2.2 GB and a lot of files. A full checkout will > take around 1 hour. > > I just upgraded to SVN 1.8. During a fresh checkout I got the following error: > > Error: In file > Error: > 'D:\Development\SVN\Releases\TortoiseSVN-1.8.0\ext\subversion\subversion\libsvn_ra_serf\util.c' > Error: line 1649: internal malfunction > > First time I've seen it. > > Ryan