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PyRun_InteractiveLoopFlags() only stops if PyRun_InteractiveOneFlags() returns E_EOF. But PyRun_InteractiveOneFlags() if an error occurs:
 - sys.stdin has no encoding attribute
 - PyArena_New() returns NULL
 - PyParser_ASTFromFile() returns NULL
 - PyImport_AddModule("__main__") returns NULL
 - run_mod() returns NULL
You can reproduce the error by adding the followg line to the end of Lib/site.py:
 sys.stdin = object()
Attached patch is for py3k, but the bug does also exist in trunk.

PyRun_InteractiveLoop() doesn't specify the possible return value. It's maybe because it's always zero and that the error are not handled :-)
http://docs.python.org/c-api/veryhigh.html#PyRun_InteractiveLoop
PyRun_InteractiveOneFlags() documentation is also wrong: the result can only be: 0 (succes), -1 (exception raised) or E_EOF (=11, end of file).

I just hit this one myself, and was about to write a bug and patch.
On reviewing the patch:
1. This really has the same issue as the original code: it detects one of a few known return values, and will infinitely loop on an unexpected return value. It would be better to explicitly check for 0 (continue), E_EOF (exit normally), and any other result (exit abnormally).
2. I don't think you want to unconditionally call PyErr_Print(), because you don't know for sure that an exception is set.
3. Returning 0 from PyRun_InteractiveLoopFlags() when an error occurs is a behavior change, which makes its documentation incorrect (meaning there should also be a doc patch). But to be honest, I don't think it's correct to return 0 in this case. It seems better to return the actual error code (which also requires a doc patch)
If you don't have time to update the patch, let me know and I'll put one together.

I don't have time to write a better patch, please improve mine :-)

tlesher> If you don't have time to update the patch, let me know and I'll put one together.
I would be happy if you write a new patch :-)

Issue #11730 has been marked as duplicate.

I'd prefer not exit program but try to use Py_FileSystemDefaultEncoding as enc when sys.stdin is invalid. On most cases, setting sys.stdin to some other invalid value does means the program could not continue running.

> On most cases, setting sys.stdin to some other invalid value does means the program could not continue running.
Sorry, it should be:
On most cases, setting sys.stdin to some other invalid value does not mean the program could not continue running.

Victor: would you object to ysj.ray's solution? 
I don't think it was an option when we last looked at this issue.

Updated patch: use Py_FileSystemDefaultEncoding (if possible) when sys.stdin is (or becomes) invalid; if none, then fails without entering infinite loop. Docs for PyRun_InteractiveLoopFlags have been updated.

Corrected const warning in previous patch.

I've failed to reproduce this using latest default on Windows 7, would someone else like to try please.

The infinite loop may occur if one of the functions called by PyRun_InteractiveOneObject() returns persistently -1. This may be the case when there is no more memory and is handled by issue 30696.
It is not possible anymore to reproduce the infinite loop reported in the initial post. See how the 'enc' parameter of PyParser_ASTFromFileObject() is NULL in the following gdb session:
$ gdb -q python -q
Reading symbols from python...done.
(gdb) run
Starting program: /path_to/src/python/master/python
[Thread debugging using libthread_db enabled]
Using host libthread_db library "/usr/lib/libthread_db.so.1".
Python 3.7.0a2+ (heads/master:bdf4298ae2, Oct 29 2017, 09:44:50) 
[GCC 7.2.0] on linux
Type "help", "copyright", "credits" or "license" for more information.
>>> import sys
>>> 
Program received signal SIGINT, Interrupt.
0x00007ffff719daa7 in select () from /usr/lib/libc.so.6
(gdb) break PyParser_ASTFromFileObject
Breakpoint 1 at 0x5555555b38d1: file Python/pythonrun.c, line 1181.
(gdb) continue
Continuing.
sys.stdin = None
Breakpoint 1, PyParser_ASTFromFileObject (fp=fp@entry=0x7ffff7461860 <_IO_2_1_stdin_>, 
 filename=filename@entry='<stdin>', enc=enc@entry=0x0, start=start@entry=256, 
 ps1=ps1@entry=0x7ffff6e7b220 ">>> ", ps2=ps2@entry=0x7ffff6e7beb8 "... ", 
 flags=0x7fffffffe338, errcode=0x7fffffffe244, arena=0x7ffff6eb2160) at Python/pythonrun.c:1181
1181 {
(gdb) continue
Continuing.
>>> print(chr(0xe9))
é
Breakpoint 1, PyParser_ASTFromFileObject (fp=fp@entry=0x7ffff7461860 <_IO_2_1_stdin_>, 
 filename=filename@entry='<stdin>', enc=enc@entry=0x0, start=start@entry=256, 
 ps1=ps1@entry=0x7ffff6e7b220 ">>> ", ps2=ps2@entry=0x7ffff6e7beb8 "... ", 
 flags=0x7fffffffe338, errcode=0x7fffffffe244, arena=0x7ffff6eb2160) at Python/pythonrun.c:1181
1181 {
(gdb) continue
Continuing.
>>> 
Closing as out of date.