The bug is present in the current version of dtoa.c from http://www.netlib.org/fp, so I'll report it upstream.  As far as I can tell, though, it's benign, in the sense that if the check is disabled then nothing bad happens, and the correct result is eventually returned (albeit after some unnecessary computation).

I suspect that the problem is in the if block around lines 1531--1543 of Python/dtoa.c:  a subnormal rv isn't being handled correctly here---it should end up being set to 0.0, but is instead set to 2**-968.