> The attached patch uses another name

In that case, you should use a name starting with an underscore
("private" namespace).

> and drains the output buffer only on a close event, not on error conditions.

Hmmm...
I don't think it's a good idea.
For example, look at this in send():
"""
        except socket.error as why:
            # winsock sometimes throws ENOTCONN
            if why.args[0] in _DISCONNECTED:
                self.handle_close()
                return b''
"""

So it looks like on Windows, ENOTCONN can be returned instead of EOF:
the pending_close_evt flag wouldn't be set, and we wouldn't drain the
output buffer.
Also, some OSes can return POLLHUP without POLLIN when the remote end
shut down the connection:
http://blogs.oracle.com/vlad/entry/poll_and_pollhup_in_solaris
readwrite() would call handle_close() without setting the flag, and
the output buffer would also be lost (Note that the current code is
probably broken: when POLLHUP is received, this likely means that the
remote end has shutdown the connection, but there might still be some
data in the input socket buffer. I'll try to dig a little...).
So I'd rather stay on the safe side, and always try to drain the
output buffer in handle_close (worth case, we'll receive a
EPIPE/ECONNRESET, initiate_send will return 0 and we'll break out of
the loop).

> I will do the patch for asynchat and do both test cases, unless you
> beat me to it.

Go ahead :-)