I'm getting "ImportError: No module named site"

echo %pythonpath% gives c:\readerisdead

I copied 'base' from the readerisdead zipfile to c:\python27\lib & also copied the base folder into the same folder as reader_archive.py

C:\readerisdead\reader_archive\reader_archive.py --output-directory C:\googlereader gives "ImportError: No module named site"

What am I doing wrong? How can I get this to work?