I know I've had the same problem, but now I don't remeber how (or whether) I solved it.
I think, what I did was recompile Python's pyexpat to link the system expat library, and tried to do the same with apache. Maybe you should ask on the mod_python mail list or on an Apache forum. The problem is also mentioned here: http://www.modpython.org/FAQ/faqw.py?req=show&file=faq02.013.htp
