"Since 32 bit floats only have ~7 digits of precision, I expected to 
get the same thing back. Not 7 digits + garbage."

This problem is a well known problem of conversion from base 2 (IEEE 
float) to base 10 (Python unicode string). Search for any programming 
FAQ, eg.
http://www.python.org/doc/faq/general/#why-are-floating-point-calculations-so-inaccurate

"Python is just reflecting what C is doing": the problem is deeper in 
the silicium. If you want a better precision, use an arbitrary 
precision float type like decimal.Decimal() or the GMP library 
(Python: gmpy)