Index: Lib/distutils/command/build_py.py
===================================================================
--- Lib/distutils/command/build_py.py	(revision 55679)
+++ Lib/distutils/command/build_py.py	(working copy)
@@ -114,7 +114,9 @@
             build_dir = os.path.join(*([self.build_lib] + package.split('.')))
 
             # Length of path to strip from found files
-            plen = len(src_dir)+1
+            plen = 0
+            if src_dir:
+                plen = len(src_dir)+1
 
             # Strip directory from globbed filenames
             filenames = [
Index: Lib/distutils/tests/test_build_py.py
===================================================================
--- Lib/distutils/tests/test_build_py.py	(revision 55644)
+++ Lib/distutils/tests/test_build_py.py	(working copy)
@@ -5,6 +5,7 @@
 
 from distutils.command.build_py import build_py
 from distutils.core import Distribution
+from distutils.errors import DistutilsFileError
 
 from distutils.tests import support
 
@@ -53,7 +54,39 @@
         self.assert_("__init__.pyc" in files)
         self.assert_("README.txt" in files)
 
+    # If package_dir is '', there is some problem in copying files
+    # specified with 'package_data'. It is fixed with patch 1720897
+    # and this test case validates the fix.
+    def test_1720897 (self):
+        # create the distribution files.
+        cwd = os.getcwd()
+        sources = self.mkdtemp()
+        open(os.path.join(sources, "__init__.py"), "w").close()
+        testdir = os.path.join(sources, "doc")
+        os.mkdir(testdir)
+        open(os.path.join(testdir, "testfile"), "w").close()
+        error = False
+        os.chdir(sources)
 
+        try:
+            dist = Distribution({"packages": ["pkg"],
+                                 "package_dir": {"pkg": ''},
+                                 "package_data": {"pkg": ['doc/*']}})
+            # script_name need not exist, it just need to be initialized
+            dist.script_name = os.path.join(sources, "setup.py")
+            dist.script_args = ["build"]
+            dist.parse_command_line()
+
+            try:
+                dist.run_commands()
+            except DistutilsFileError:
+                error = True
+        finally:
+            # if directory is not reverted, cleanup is failing on windows.
+            os.chdir(cwd)
+            if error:
+                self.fail("failed the test for package_data when package_dir is ''")
+            
 def test_suite():
     return unittest.makeSuite(BuildPyTestCase)