Sreepriya, are you still working on this issue? If no I'll be happy to take it over, is yes start with fixing following things:
- start with test - this is the most important to have each feautre tested
- decode_data, as David mentioned, needs to have default value True, meaning that __init__ should look like this: 
def __init__(self, server, conn, addr, data_size_limit=DATA_SIZE_DEFAULT, map=None, decode_data=True)
Assigning True in __init__ will make this value always True, and that's not the point. 
- add deprecation warning about this parameter using warnings module:
warnings.warn('decode_data=True is deprecated, data will not be decoded by default', DeprecationWarning, 2)
- as for the found_terminator method what David means is to decode data in the first if, where commands are checked, to simplify processing of this part (David please correct me if I'm wrong) and not what you did
- and finally you need to update the docs to include decode_data parameter with information about how it works and it's deprecation