> On second thought, there is probably no good reason to ignore the build-* settings.

I was just about to mention this. I'm not an expert on distutils internals and whether this is the best way to accomplish what's needed, but the approach seems reasonable to me. Why the empty list and the extend, though? Why not something like the following?

if sys.prefix == sys.base_prefix:
    # not in venv
    ignore_options = []
else:
    # in venv
    ignore_options = ['install-base', ...]

My other comments on the patch are generic, i.e. you need to look at the tests and docs, too.

Anyway, thanks for the effort you've spent to come up with a patch. Can I suggest that you sign a PSF contributor form to license your work to the PSF?

http://www.python.org/psf/contrib/contrib-form/