I don't know if this is supposed to be in the API or not.  I'm too tired to care, but here are my comments on the code.

It would be better to use a variable name other than new, since new is a keyword in C++.  isspace() checks for any whitespace, so not only can there be spaces, there can be tabs, carriage returns, new lines, etc.  I don't know if the code is correct or the comment is. I see you have a test for other whitespace, so I would just update the comment to say _any_ whitespace.

Does byteslen need the + 1?

Is there a macro to get ob_bytes rather than accessing directly?
    buf = ((PyBytesObject *)new)->ob_bytes;

It would be good to add the index position (i) in the error msg.  It might be hard to see/non-obvious from the 2 chars (or potentially ambiguous).

How about adding a test that passes a buffer('') and buffer('00')?

These are all nits.  Assuming Guido is fine with the API, I'd say clean it up and check it in.