TortoiseSVN tree conflict on merge with no previews

Question

I just installed VisualSVN 3.5.6, and I'm using Tortoise SVN 1.8.11.

I followed these steps:

1. Using the VisualSVN manager I created a new repository called "test"
2. Within this repository I created project_1/trunk and project_1/branches
3. I checked out project_1/trunk
4. I added a new file to trunk (foo.c), the first line simply reading "initial commit"
5. I SVN add/commit this file
6. Using TortoiseSVN I make a new branch from trunk and call it project_1/branches/001
7. In trunk I modify foo.c and alter the first line and svn commit to trunk
8. In the branch I also modify line 1 of foo.c, with a different value, and commit to the branch
9. I now try to Merge into trunk from the branch

As expected I get a tree conflict. I also see an error which says, "One or more conflicts were produced while merging r3:4 into 'D:\svn local tests\project_1 trunk' -- resolve all conflicts and rerun the merge to apply the remaining unmerged revisions"

In my trunk working copy I have the .svn folder, and foo.c which is flagged as conflicted. There is no other file.

If I right click and SVN Edit Conflicts on foo.c I see this:

I guess I have to manually use Winmerge (or similar) to compare the file from branch and trunk, apply whatever changes I want to the trunk file, marked it as resolved, then Merge once again? I had expected the edit conflict window to show me a side-by-side diff so I could move the changes to a %resolved pane.

I also note the Source Left URL is: https://foo.bar.com:444/svn/test/project_1/trunk/foo.c@3 This gives me a 404 error, but if I remove @3 the URL is fine (maybe VisualSVN doesn't support showing revisions I suppose?)