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I'm having trouble with this as well :( It's pretty much a blocker for
integrating distutils-based extension builds with an autotools library
build, because the "make distcheck" target explicitly does the build in
a subtree of the source directory, and write-protects the srcdir during
the build.
Effectively the source is referred to in my setup.py as living in
"../../pyext", which translates into distutils attempting to build the
extension in "build/temp.linux-i686-2.5/../../pyext/", which is the
write-protected source dir. This would work okay if the directory path
to the source file were ignored when constructing the output path: would
the proposed patch(es) fix this?