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When installing python 2.6, I used: 
 ./configure --prefix=/home/name/usr
Installation was fine and everything was installed to:
 ~/usr/lib/python2.6
But the .so files were installed to:
 ~/usr/lib/python
As ~/usr/lib/python was (no longer) declared in my PYTHONPATH, I ran
into import issues. The problem was due to a forgotten file:
 ~/.pydistutils.cfg
So this is clearly a user error, but I wonder if it is something which
should be avoided at the setup.py level. 
When installing python, the installation locations are derived from the
results of ./configure. When setup.py is eventually called, the
installation locations can change. This seems undesirable. Would it be
better if setup.py instructed distutils to ignore any configuration file
so that the installation directories matched what was used by the rest
of 'make install'?
Related: http://bugs.python.org/issue1180 

Could an installation guru please take a look at this?

Not reading .pydistutils.cfg during CPython’s build seems a good idea to me. I would like confirming opinions.

rdm notes in duplicate Issue6138:
There is a bug here, of some sort. Either the .pydistutils.cfg file's
install clause should override the default --prefix somehow, or the
error message should indicate where the setting for 'home' and
'--prefix' came from to enable the user to debug the configuration. In
the latter case there would also need to be a way to explicitly tell
either make install or configure to ignore .pydistutils.cfg. In the
former case, an explicit --prefix passed to configure would need to
override .pydistutils.cfg.