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This is not a problem with the win32 proxy detection code, 
but with urllib in general.

urllib itself does not handle the concept of "proxy exclude 
list", and nor does it handle the localhost case - if a 
proxy is configured, it uses it.

So either you are after an enhancement to urllib to allow 
certain addresses to bypass the proxy, or a technique to 
allow the registry to be ignored.  I believe the latter can 
be handled by setting "ignored_proxy=something" in the 
environment.

Can you clarify exactly what you want here?  If it is the 
urllib enhancement then I am not the best person for this - 
I don't have a proxy server available, and don't have much 
code that uses urllib.