I got a similar error message when running the Plone 4 coredev buildout, using openSUSE 10.3 (X86-64). I haven't explicitly installed setuptools, only as part of "distribute". Instead of the "Getting distribution for 'setuptools'" message above, I got "Getting distribution for 'distribute'".

  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/zc.buildout-1.4.1-py2.6.egg/zc/buildout/easy_install.py", line 543, in _get_dist
    dist.location, ws, self._dest, dist)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/zc.buildout-1.4.1-py2.6.egg/zc/buildout/easy_install.py", line 301, in _call_easy_install
    ws, False,
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/buildout.dumppickedversions-0.4-py2.6.egg/buildout/dumppickedversions/__init__.py", line 27, in get_dist
    dists = old_get_dist(self, requirement, ws, always_unzip)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/zc.buildout-1.4.1-py2.6.egg/zc/buildout/easy_install.py", line 494, in _get_dist
    dist = self._fetch(avail, tmp, self._download_cache)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/zc.buildout-1.4.1-py2.6.egg/zc/buildout/easy_install.py", line 457, in _fetch
    new_location = self._index.download(dist.location, tmp)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/distribute-0.6.6-py2.6.egg/setuptools/package_index.py", line 396, in download
    found = self._download_url(scheme.group(1), spec, tmpdir)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/distribute-0.6.6-py2.6.egg/setuptools/package_index.py", line 630, in _download_url
    return self._attempt_download(url, filename)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/distribute-0.6.6-py2.6.egg/setuptools/package_index.py", line 639, in _attempt_download
    headers = self._download_to(url, filename)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/distribute-0.6.6-py2.6.egg/setuptools/package_index.py", line 546, in _download_to
    fp = self.open_url(url)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/distribute-0.6.6-py2.6.egg/setuptools/package_index.py", line 583, in open_url
    return open_with_auth(url)
  File "/home/zope/buildouts/zope-instances/plone4coredev/eggs/distribute-0.6.6-py2.6.egg/setuptools/package_index.py", line 735, in open_with_auth
    fp = urllib2.urlopen(request)
  File "/home/zope/local/python-2.6.3/lib/python2.6/urllib2.py", line 124, in urlopen
    return _opener.open(url, data, timeout)
  File "/home/zope/local/python-2.6.3/lib/python2.6/urllib2.py", line 389, in open
    response = self._open(req, data)
  File "/home/zope/local/python-2.6.3/lib/python2.6/urllib2.py", line 407, in _open
    '_open', req)
  File "/home/zope/local/python-2.6.3/lib/python2.6/urllib2.py", line 367, in _call_chain
    result = func(*args)
  File "/home/zope/local/python-2.6.3/lib/python2.6/urllib2.py", line 1140, in http_open
    return self.do_open(httplib.HTTPConnection, req)
  File "/home/zope/local/python-2.6.3/lib/python2.6/urllib2.py", line 1112, in do_open
    h.request(req.get_method(), req.get_selector(), req.data, headers)
  File "/home/zope/local/python-2.6.3/lib/python2.6/httplib.py", line 898, in request
    self._send_request(method, url, body, headers)
  File "/home/zope/local/python-2.6.3/lib/python2.6/httplib.py", line 935, in _send_request
    self.endheaders()
  File "/home/zope/local/python-2.6.3/lib/python2.6/httplib.py", line 892, in endheaders
    self._send_output()
  File "/home/zope/local/python-2.6.3/lib/python2.6/httplib.py", line 764, in _send_output
    self.send(msg)
  File "/home/zope/local/python-2.6.3/lib/python2.6/httplib.py", line 723, in send
    self.connect()
  File "/home/zope/local/python-2.6.3/lib/python2.6/httplib.py", line 704, in connect
    self.timeout)
  File "/home/zope/local/python-2.6.3/lib/python2.6/socket.py", line 504, in create_connection
    sock = socket(af, socktype, proto)
RuntimeError: maximum recursion depth exceeded while calling a Python object
*************** PICKED VERSIONS ****************
[versions]
distribute = 0.6.6
plone.recipe.zope2instance = 3.6

*************** /PICKED VERSIONS ***************
mr.developer: ****************************************
mr.developer: There have been errors during checkout, check the output above or use 'develop status'.
mr.developer: ****************************************