A current limitation of doctest is that it can't handle 
output
containing blank lines, since it uses blank lines to 
detect the end of
the example.

This patch adds a new option, END_WITH_DEDENT, 
that gets around that
problem by using a dedent to detect the end of 
examples instead.  In
particular, when END_WITH_DEDENT is specified, 
the end of each
indented doctest example is marked by a dedent 
past its original
prompt (>>>).  Thus, blank lines may appear within 
the output.
However, trailing blank lines are still disallowed.  
Unindented
docstring examples continue to be termined by a 
blank line (since
dedenting past the prompt is impossible).

Here's an example use:

def f():
    r"""
    A doctest example with a blank line:

        >>> print 'One\n\nTwo'
        One

        Two

    Note that ending with dedents also means that we 
can skip the
    blank lines around doctest examples if we want:
        >>> print 1
        1
    This dedent signifies the end of the example; 
there's no need for
    a blank line.
    """

The END_WITH_DEDENT uses the same optionflags 
system that is already
used by DONT_ACCEPT_TRUE_FOR_1.

The patch was made avainst revision 1.33 of 
doctest.py.

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If this patch looks good, I'd be happy to write a patch for 
the docs & test cases.

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This patch is probably mutually exclusive with patch 
#933238 [1], since they both have the same goal: to 
allow blank lines in doctest output. I thought of this 
solution first, but I think I prefer the other patch. 
Here's a comparison of pros and cons of this patch vs 
#933238.

[-] it needs a special option to turn it on
[-] it doesn't handles trailing blank lines
[-] it will break external tools like epytext and 
restructuredtext that look for doctest blocks.
[+] the user doesn't have to manually add blank line 
markers.

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Rejecting this one; let's focus on your other patch instead.