environment info:

$ echo $PATH
/opt/local/bin:/opt/local/sbin:/sw/bin:/sw/sbin:/usr/bin:/bin:/usr/sbin:/sbin:/usr/local/bin:/usr/X11/bin:/usr/X11R6/bin:/opt/local/bin:/Developer/Platforms/iPhoneOS.platform/Developer/usr/bin:~/.utility_scripts
$ which easy_install
/usr/bin/easy_install

specifically, let's try the simplejson module (I know it's the same thing as import json in 2.6, but that isn't the point)

$ sudo easy_install simplejson
Searching for simplejson
Reading http://pypi.python.org/simple/simplejson/
Reading http://undefined.org/python/#simplejson
Best match: simplejson 2.1.0
Downloading http://pypi.python.org/packages/source/s/simplejson/simplejson-2.1.0.tar.gz#md5=3ea565fd1216462162c6929b264cf365
Processing simplejson-2.1.0.tar.gz
Running simplejson-2.1.0/setup.py -q bdist_egg --dist-dir /tmp/easy_install-Ojv_yS/simplejson-2.1.0/egg-dist-tmp-AypFWa
The required version of setuptools (>=0.6c11) is not available, and
can't be installed while this script is running. Please install
 a more recent version first, using 'easy_install -U setuptools'.

(Currently using setuptools 0.6c9 (/System/Library/Frameworks/Python.framework/Versions/2.6/Extras/lib/python))
error: Setup script exited with 2

ok, so I'll update setuptools...

$ sudo easy_install -U setuptools Searching for setuptools Reading http://pypi.python.org/simple/setuptools/ Best match: setuptools 0.6c11 Processing setuptools-0.6c11-py2.6.egg setuptools 0.6c11 is already the active version in easy-install.pth Installing easy_install script to /usr/local/bin Installing easy_install-2.6 script to /usr/local/bin

Using /Library/Python/2.6/site-packages/setuptools-0.6c11-py2.6.egg Processing dependencies for setuptools Finished processing dependencies for setuptools

I'm not going to speculate, but this could have been caused by any number of environment changes like the Leopard -> Snow Leopard upgrade, MacPorts or Fink updates, or multiple Google App Engine updates.