I ran into this bug too. Buildout's bootstrap.py can't handle the
distribute/setuptools saga. You need to tell bootstrap.py to use buildout
2.1.0.

@:~$ python bootstrap.py -v 2.1.0 --distribute

Then it all works. Or or did for me, anyway.

-- 
Raoul Snyman
e: [email protected] / [email protected]
m: 082 550 3754
Sent from my mobile phone, please excuse the brevity

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