hi,
i would like to bring up this topic again since a python based open source alternative to flash which could be used to create browser games would be super awesome. :)
if i understand this correctly then the main problem of something like that is security.
In my experience, the general consensus with sandboxing python is - don't try it. There are simply too many holes to plug, and finding them in the first place is often a matter of trial and error.
Having said that, there was a blog post recently (sorry, don't remember where) that talked about compiling Python into Tamarin VM code. There was some mention of either using PyPy as a starting point, or perhaps as a reference model.
So what you're proposing may already be in the works. :)