I had the same problem on OSX 10.6.6. But just a simple easy_install mysql-python
on terminal did not solve it as another hiccup followed:
error: command 'gcc-4.2' failed with exit status 1
.
Apparently, this issue arises after upgrading from XCode3 (which is natively shipped with OSX 10.6) to XCode4. This newer ver removes support for building ppc arch. If its the same case, try doing as follows before easy_install mysql-python
sudo bash
export ARCHFLAGS='-arch i386 -arch x86_64'
rm -r build
python setup.py build
python setup.py install
Many thanks to Ned Deily for this solution. Check here