Having trouble with relative imports

[Echo]

Here is my setup:
rpg
-objects
--__init__.py
--gameobject.py
--material.py
-__init__.py
-run_tests.py
-stats.py

the contents of run_test.py is:
import objects as o

the contents of objects/__init__.py is:
from material import *

in objects/material.py I have:
from .gameobject import GameObject
from ..stats import stats

When I try to run run_tests.py, I get this traceback:
(1:30:59 PM) OshEcho: echo at MobileEcho ~/projects/rpg $ python run_tests.py
Traceback (most recent call last):
  File "run_tests.py", line 4, in <module>
    import objects as o
  File "/home/echo/projects/rpg/objects/__init__.py", line 3, in <module>
    from material import *
  File "/home/echo/projects/rpg/objects/material.py", line 4, in <module>
    from ..stats import stats
ValueError: Attempted relative import beyond toplevel package


Could someone point out to me what I am doing wrong?
I'm running Python 2.5 on Gentoo

-- 
-Echo