I have just spent a few hours getting past this error and this thread is a 
top google result, so I am adding my fix:

I had the same issue as Andrew. First, note that the tkf repo hasn't been 
updated for years, and the current emacs-ipython-notebook repo is 
millejoh's fork: https://github.com/millejoh/emacs-ipython-notebook. His is 
the current MELPA package, so under emacs 24, use package-list-packages and 
install "ein" to get emacs-ipython-notebook.

Second, I had an old version of ipython. I uninstalled all the ipython on 
my system and reinstalled with pip: pip install ipython (giving me version 
4.0.0).

Then it worked.

On Wednesday, April 16, 2014 at 2:53:54 PM UTC-5, Andrew Dabrowski wrote:
>
> I'm trying iPython 2.0, but now I'm getting this error:
>
> https://github.com/tkf/emacs-ipython-notebook/issues/137
>
> That seems to still be an open issue with iPython 2.  I get the same error 
> whether I use stable emacs 24 or a bleeding edge version.
>
>
>

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