Attached a one line fix that fixes this issue.

susam@nifty:~/pydoc-test$ pydoc -w ../pydoc-subject/
wrote calc.html
wrote calc.formulae.html
wrote config.html
wrote main.html
susam@nifty:~/pydoc-test$ ls
calc.formulae.html  calc.html  config.html  main.html

Diff:

--- /usr/lib/python2.7/pydoc.py.original	2011-04-12 04:56:19.000000000 +0530
+++ /usr/lib/python2.7/pydoc.py	2011-04-12 05:37:20.000000000 +0530
@@ -2299,6 +2299,7 @@
                 if ispath(arg) and os.path.isfile(arg):
                     arg = importfile(arg)
                 if writing:
+                    sys.path.insert(0, arg)
                     if ispath(arg) and os.path.isdir(arg):
                         writedocs(arg)
                     else: