--- ./Lib/distutils/sysconfig.py.DIST	2008-08-06 23:37:01.000000000 +0300
+++ ./Lib/distutils/sysconfig.py	2008-09-29 00:47:45.000000000 +0300
@@ -25,6 +25,8 @@
 # Path to the base directory of the project. On Windows the binary may
 # live in project/PCBuild9.  If we're dealing with an x64 Windows build,
 # it'll live in project/PCbuild/amd64.
+# NOTE: project_base is de facto top-build directory and may differ
+# from top-source directory (at least on posix system).
 project_base = os.path.dirname(os.path.abspath(sys.executable))
 if os.name == "nt" and "pcbuild" in project_base[-8:].lower():
     project_base = os.path.abspath(os.path.join(project_base, os.path.pardir))
@@ -73,13 +75,10 @@
         prefix = plat_specific and EXEC_PREFIX or PREFIX
     if os.name == "posix":
         if python_build:
-            base = os.path.dirname(os.path.abspath(sys.executable))
             if plat_specific:
-                inc_dir = base
+                inc_dir = project_base
             else:
-                inc_dir = os.path.join(base, "Include")
-                if not os.path.exists(inc_dir):
-                    inc_dir = os.path.join(os.path.dirname(base), "Include")
+                inc_dir = os.path.join(get_config_var('srcdir'), "Include")
             return inc_dir
         return os.path.join(prefix, "include", "python" + get_python_version())
     elif os.name == "nt":
--- ./Lib/distutils/tests/test_build_ext.py.DIST	2008-09-24 21:47:13.000000000 +0300
+++ ./Lib/distutils/tests/test_build_ext.py	2008-09-28 01:43:35.000000000 +0300
@@ -19,7 +19,11 @@
         self.sys_path = sys.path[:]
         sys.path.append(self.tmp_dir)
 
-        xx_c = os.path.join(sysconfig.project_base, 'Modules', 'xxmodule.c')
+        if os.name == "posix":
+            srcdir = sysconfig.get_config_var('srcdir')
+        else:
+            srcdir = sysconfig.project_base
+        xx_c = os.path.join(srcdir, 'Modules', 'xxmodule.c')
         shutil.copy(xx_c, self.tmp_dir)
 
     def test_build_ext(self):