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logging.shutdown includes a try/except block to avoid emitting spurious IO errors while the interpreter is shutting down. This fails if a registered handler tries to do IO (such as calling flush()) in its release method.
It would be better if the flush-and-close block was written as:
 try:
 hr.acquire()
 try:
 hr.flush()
 hr.close()
 finally:
 hr.release()
 except (IOError, ValueError):
 # Tolerate handlers that try to do IO in release()

I'm not against making this change, but I'm curious - why would a handler do clean-up I/O in its release() method (which is just for releasing the I/O lock) where it could just as easily override the close() method to do the same thing? It seems like programmer error to be doing any I/O in a handler after close() is called on it.

The particular app that is getting affected is clearing out and rebuilding the logging configuration without restarting in response to a notification that the application config has changed. This was working OK on 2.6, but started misbehaving when ported to 2.7.
It's http://pypi.python.org/pypi/ConcurrentLogHandler that's calling self.stream.flush() inside release(), and I suspect that *is* a bug on that side as well.
It's also possible that we should just be skipping the use of ConcurrentLogHandler entirely on 2.7, but I haven't looked into the feasibility of that as yet.
This specific bug report is just because I noticed that the stdlib is *trying* to be tolerant of handler misbehaviour, but not quite succeeding in this particular case. Perhaps we should be writing something out to stderr when ignoring one of these errors?

Dan and Amit worked out a patch for ConcurrentLogHandler (https://bugzilla.redhat.com/show_bug.cgi?id=858912) so I'm OK with rejecting this one.