Probably the best way to do this is to use the setuptools package_data directive. This does mean using setuptools (or distribute) instead of distutils, but this is a very seamless "upgrade".
Here's a full (but untested) example:
from setuptools import setup, find_packages
setup(
name='your_project_name',
version='0.1',
description='A description.',
packages=find_packages(exclude=['ez_setup', 'tests', 'tests.*']),
package_data={'': ['license.txt']},
include_package_data=True,
install_requires=[],
)
Note the specific line that's critical here:
package_data={'': ['license.txt']}
This is a dict of package names (empty = all packages) to a list of patterns (can include globs). For example, if you want to only specify files within your package, you can do that too:
package_data={'yourpackage': ['*.txt', 'path/to/resources/*.txt']}
The solution here is definitely not to rename your non-py files with a .py extension.
See Ian Bicking's presentation for more info.