My push is failing with the message "Transport operation not possible: http does not support mkdir()"

If you are not logged in and use the lp: address for pushing, bzr will use the http protocol. However, you can't create new branches via http, and in Launchpad you can't push at all without being authenticated. To have this work in Launchpad, we use the bzr+ssh protocol; to enable this, you just need to log in to Launchpad:

  bzr lp-login <your launchpad id>

This requires that your SSH keys are set up properly, of course. Check out https://launchpad.net/people/+me/+editsshkeys to accomplish that if you haven't figured that step out yet.