I had a similar problem and circumvented the problem. I currently have paster running on a remote host, but I am still developing, so I needed a means to restart paster, but manually by hand was too time consuming, and daemon didnt work. So I always had to keep a shell window open to the server and running paster without --daemon in there. Once I finished my work for that day, and i closed the shell, paster died, which is bad.
I circumvented that by running paster non daemonized in a "screen".
Simply type "screen" in your shell of choice, you will usually depending on your linux be presented with a virtual terminal, that will keep running even when you log out your remote session. Start paster as usually in your new "window" (the screen) with --reload but without daemon, and then detach the window, so you can return to your normal shell (detach = CTRL-A, then press D). You can re-enter that screen by typing "screen -r". If you would like to kill it, reconnect it (screen -r) and inside the screen type CTRL-A, then press K.
Hope that helps.