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For Python 2, file.read() looks wrong: if only checks ferror() if fread() returns 0, whereas Py_UniversalNewlineFread() can call fread() more than once, and according to fread() manual page, fread() result can be different than 0 on error.
"If an error occurs, or the end of the file is reached, the return value is a short item count (or zero)."
http://linux.die.net/man/3/fread
Attached fileobject.c rewrites error handling in fileobject.c. The main change if that ferror() is called even if fread() does not return 0.