Review comments added.  I don't really see why the fix should not be as trivial as:

diff -r ca9bca7aecda Lib/telnetlib.py
--- a/Lib/telnetlib.py  Tue Dec 10 16:06:46 2013 -0600
+++ b/Lib/telnetlib.py  Tue Dec 10 18:08:37 2013 -0800
@@ -312,7 +312,9 @@
             poller.register(self, poll_in_or_priority_flags)
             while i < 0 and not self.eof:
                 try:
-                    ready = poller.poll(call_timeout)
+                    # Poll takes its timeout in milliseconds.
+                    ready = poller.poll(None if timeout is None
+                                        else 1000 * call_timeout)
                 except select.error as e:
                     if e.errno == errno.EINTR:
                         if timeout is not None:
@@ -682,7 +684,8 @@
             poller.register(self, poll_in_or_priority_flags)
             while not m and not self.eof:
                 try:
-                    ready = poller.poll(call_timeout)
+                    ready = poller.poll(None if timeout is None
+                                        else 1000 * call_timeout)
                 except select.error as e:
                     if e.errno == errno.EINTR:
                         if timeout is not None: