=== modified file 'python-mode.el'
--- python-mode.el	2012-02-15 20:51:45 +0000
+++ python-mode.el	2012-02-15 22:54:19 +0000
@@ -9102,13 +9102,10 @@
 
 (defun py-guess-py-install-directory ()
   (interactive)
-  (let* ((bufn (buffer-file-name))
-         (erg (when (or (string-match "python-mode.el" bufn)(string-match "python-components-mode.el" bufn)) (file-name-directory (buffer-file-name)))))
+  (let ((erg (file-name-directory (locate-library "python-mode"))))
     (when erg
-      (add-to-list 'load-path erg)
-      (setq py-install-directory erg)
-      (when (interactive-p) (message "%s" erg))
-      erg)))
+      (when (interactive-p) (message "Setting py-install-directory to: %s" erg))
+      (setq py-install-directory erg))))
 
 (defun py-set-load-path ()
   "Include needed subdirs of python-mode directory. "
@@ -9120,7 +9117,9 @@
          (add-to-list 'load-path (concat (expand-file-name py-install-directory) "/test"))
          (add-to-list 'load-path (concat (expand-file-name py-install-directory) "/tools")))
         ((when py-guess-py-install-directory-p
-           (py-guess-py-install-directory)))
+           (let ((guessed-py-install-directory (py-guess-py-install-directory)))
+             (when guessed-py-install-directory
+               (add-to-list 'load-path guessed-py-install-directory)))))
         (t (error "Please set `py-install-directory', see INSTALL"))
         (when (interactive-p) (message "%s" load-path))))
 
@@ -9233,7 +9232,13 @@
                                                  (current-column))))
          (^ '(- (1+ (current-indentation))))))
   (when python-load-extended-executes-p
-    (add-hook 'python-mode-hook '(lambda ()(load (concat py-install-directory "/python-extended-executes.el") nil t))))
+    (if (not py-install-directory)
+        (unless (and py-guess-py-install-directory-p
+                     (py-guess-py-install-directory))
+          (error "Need to set py-install-directory.")))
+    (add-hook 'python-mode-hook
+              '(lambda ()
+                 (load (concat py-install-directory "python-extended-executes.el") nil t))))
   ;; Python defines TABs as being 8-char wide.
   (set (make-local-variable 'tab-width) py-indent-offset)
   ;; Now do the automagical guessing