http://groups.google.com/group/pylons-discuss/msg/0b085996384d4fe3

I experienced an issue with installing PIL v.1.1.7 for py2.6 on mac osx
10.6. The egg on pypi was mis-organized. It installed fine but I would
receive errors when I tried to import PIL. It was easily rectified by
adding a PIL directory below the installed egg directory. Maybe you are
experiencing the same problem?
Here is what PIL looked like straight from pypi:
Under the following directory was only one directory, EGG-INFO, and then all
of the *.py files that make up the PIL library.
site-packages/PIL-1.1.7-py2.6-macosx-10.6-universal.egg/
But for the importer to properly recognize the package it should look like
the following with all the *.py files in the PIL directory:
site-packages/PIL-1.1.7-py2.6-macosx-10.6-universal.egg/
/EGG-INFO
/PIL
Therefore, just create a PIL directory and move all the .py files there.