Even worse, if the /tmp/r2/lib/python-2.7/site-packages directory doesn't exist
it blows up.

Running:

 python2 ./setup.py install --prefix /tmp/r2

to create the full path then running with PYTHONPATH works. 8-(.

I tracked it down to it's doing an egg install at:

> /usr/lib/python2.7/dist-packages/setuptools/command/install.py(67)run()
-> self.do_egg_install()
(Pdb) l
 62
 63 B           if not self._called_from_setup(inspect.currentframe()):
 64                 # Run in backward-compatibility mode to support bdist_* commands.
 65                 orig.install.run(self)
 66             else:
 67  ->             self.do_egg_install()

even though:

  (Pdb) p not self._called_from_setup(inspect.currentframe())
  True

so it should be running orig.install.run(self). WTH?

Also running:

 (Pdb)  p orig.install.run(self)

does exactly what is expected.