Recent changes to either configure or setup.py seem to
have conspired to prevent the readline module from
building on MacOSX.  I configured and built with

    LDFLAGS='-L/sw/lib' CPPFLAGS='-I/sw/include' ../
configure '--prefix=/Users/skip/local'
    make

The relevant readline bits are in /sw/... but the
module is not built.  The following bits containing
/sw grep out of the generated Makefile:

    INSTALL=        /sw/bin/install -c
    CPPFLAGS=       -I. -I$(srcdir)/Include -I/sw/include
    LDFLAGS=        -L/sw/lib
    CONFIG_ARGS=    '--prefix=/Users/skip/local' 
'CPPFLAGS=-I/sw/include' 'LDFLAGS=-L/sw/lib'

Assigning to Brett since he touched this most recently.

Skip