The two lines in mn.sty (version 1.4) involving the
\bibhang command cause fatal errors when used with
natbib. Use mn-nat.sty
instead, which has them commented them out and works fine.
The nat2jour.pl
program will then change \documentstyle[...]{mn-nat} to
\documentstyle[...]{mn} for you, since natbib is no longer
needed in its output files.
% Set length of hanging indentation for bibliography entries
%
%%% \newlength{\bibhang}
%%% \setlength{\bibhang}{2em}
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