Python has some nice functional programming tools that are likely to fit your needs well. Check out lambda functions and map. Also, you're using dicts when it seems like you'd be much better served with lists. For the simple example you provided, try this idiom. Note that map would be better and faster but may not fit your needs:
def mysum(d):
s = 0
for x in d:
s += x
return s
def mybigfunction():
d = (x1, x2, x3, x4, x5, x6, x7, x8, x9)
return mysum(d)
You mentioned having a lot of local variables, but frankly if you're dealing with lists (or tuples), you should use lists and factor out all those local variables in the long run.