Yes, we could do that. However, my concerns are:

1) We cannot be the only Python user that experience this issue? I 
would prefer one of these solutions (in this order):
 a) A parameter to Py_Initialize (structure) that controls its 
behaviour.
 b) A #define in pyconfig.h controls whether this should be done or not.
However, since I am not a Python developer myself, I cannot judge how 
much this would affect other things. I also realize that this involves 
some work and that it has very low priority.
2) We have to remember to do this change every time we upgrade to a 
newer version of Python. In earlier releases of Python where 
PyImport_AppendInittab did not exist, we had to do changes to the 
Python code every time we upgraded which was a hazzle. This is why I 
prefer the current workaround we are using where we reset the CRT 
report mode after Py_Initialize().
Your efforts are much appreciated and I realize that the current 
workaround we are using will probably be the final solution.