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Yes, I'm on 2.6. I checked the Python 3.x tarfile just for this one line in TarFile.next():
self.members.append(tarinfo)
to conclude it would have the same problem.
Reducing 2.5gb memory usage as measured in my particular case by 60%, still leaves 1.5gb ram burned which is too much on a 32-bit 2gb ram machine.
My solution was to comment out that line which worked perfectly for my case but may not be the solution for the module.