IIUC, I get the correct behavior:

trunk-py$ ./python ~/Desktop/tcsv.py
['fld1', 'fld2', 'fld3 ', 'fld4']
['fld1', 'fld2', 'fld3 \r', 'fld4']

trunk-py$ cat ~/Desktop/tcsv.py
#! /usr/local/bin/python

import csv

d = 'fld1,fld2,"fld3 ",fld4\r\n'
d2 = 'fld1,fld2,"fld3 \r'
d3 = '",fld4\r\n'

r = csv.reader([d, d2, d3], dialect="excel")
for f in r:
        print f