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I don't think the patch, cygwin-smaller.diff, is correct. The value of 
static_lib_extension needs to remain ".a". Otherwise, shared 
extensions attempting to build against a library that only offers a 
static version will fail to link.
AFAICT, Cygwin needs a concept that is not currently supported by 
distutils -- the ability to specify a shared library *link* extension 
(i.e., ".dll.a") which is different from the shared library extension 
(i.e., ".dll"). On Unix they are the same (e.g., ".so"), but on Cygwin 
they are different because of how Windows handles DLLs -- import 
library versus DLL.