OS X py2app confusion

[bex]

Im baffled about this one...

Im running OS 10.3, and Python 2.3. I installed py2app 0.17 and never
used it, then installed py2app 0.2. It refuses to work. None of the
samples will build. Observe:

$ pwd
/Developer/Python/py2app/Examples/pygame
$ python setup.py py2app
Traceback (most recent call last):
  File "setup.py", line 8, in ?
    import py2app
ImportError: No module named py2app
$

No module??? huh??? Its clearly there in the appropriate place:

$ pwd
/Library/Python/2.3
$ ls
PyObjC          README          py2app.pth      wxPython
PyObjC.pth      py2app          wx
$ ls py2app
altgraph        bdist_mpkg      macholib        modulegraph     py2app
$ ls py2app/py2app/
__init__.py             command                 filters.pyo
__init__.pyc            create_appbundle.py     install.py
__init__.pyo            create_appbundle.pyc    install.pyc
apptemplate             create_appbundle.pyo    install.pyo
bootstrap               create_pluginbundle.py  recipes
build_app.py            create_pluginbundle.pyc scripts
build_app.pyc           create_pluginbundle.pyo util.py
build_app.pyo           filters.py              util.pyc
bundletemplate          filters.pyc             util.pyo
$ more py2app.pth
py2app
$

I was confused about the packaging, so I tried moving all the folders
in py2app into /Library/Python/2.3/ and deleted the py2app.pth file,
but it still wouldn't load the module.

Any insight into the voodoo magic required to get this working?