Python – sorl.thumbnail : ‘thumbnail’ is not a valid tag library

I am trying to install sorl.thumbnail but am getting the following error message:

'thumbnail' is not a valid tag library: Could not load template library from django.templatetags.thumbnail, No module named PIL

This error popped up in this question as well
need help solving sorl-thumbnail error: "'thumbnail' is not a valid tag library:"
but the solution offered there is no good for me. The solution was to append the project folder to all imports in the sorl files. I want to keep my apps separate from the project they are in for obvious reasons.

I have placed the sorl folder in my project folder
I have placed 'sorl.thumbnaills' under installed apps
and finally placed {% load thumbnail %} in base.html

$python2.5 
>>>import PIL
>>>import sorl

These work.

Using python2.5, on ubuntu 9.04 with django 1.1 with appengine-patch

To try some other things out i placed in settings.py file:

import sys
sys.path.append("/home/danielle/bu3/mysite/sorl/thumbnail")

But that didnt work either.
Some more help would be appreciated … how should i change my path?

current path (without above mentioned import):
['/home/danielle/bu3/mysite', '/home/danielle/bu3/mysite/common', '/home/danielle/bu3/mysite/common/appenginepatch/appenginepatcher/lib', '/home/danielle/bu3/mysite/common/zip-packages/django-1.1.zip', '/home/danielle/bu3/mysite/common/appenginepatch', '/usr/local/google_appengine', '/usr/local/google_appengine/lib/antlr3', '/usr/local/google_appengine/lib/yaml/lib', '/usr/local/google_appengine/lib/django', '/usr/local/google_appengine/lib/webob', '/home/danielle/bu3/mysite', '/usr/lib/python2.5/site-packages/setuptools-0.6c9-py2.5.egg', '/usr/lib/python2.5/site-packages/ZopeSkel-2.10-py2.5.egg', '/usr/lib/python2.5/site-packages/virtualenv-1.3.2-py2.5.egg', '/usr/lib/python2.5/site-packages/pip-0.3.1-py2.5.egg', '/usr/lib/python2.5/site-packages/virtualenvwrapper-1.12-py2.5.egg', '/usr/lib/python2.5/site-packages/PyYAML-3.08-py2.5-linux-i686.egg', '/usr/lib/python2.5/site-packages/xlutils-1.3.0-py2.5.egg', '/usr/lib/python2.5/site-packages/errorhandler-1.0.0-py2.5.egg', '/usr/lib/python2.5/site-packages/xlwt-0.7.1-py2.5.egg', '/usr/lib/python2.5/site-packages/xlrd-0.7.0-py2.5.egg', '/usr/lib/python2.5/site-packages/Fabric-0.0.9-py2.5.egg', '/usr/lib/python2.5/site-packages/multitask-0.2.0-py2.5.egg', '/usr/lib/python2.5/site-packages/logilab.pylintinstaller-0.15.2-py2.5.egg', '/usr/lib/python2.5/site-packages/pylint-0.15.2-py2.5.egg', '/usr/lib/python2.5/site-packages/clonedigger-1.0.9_beta-py2.5.egg', '/usr/lib/python2.5/site-packages/yolk-0.4.1-py2.5.egg', '/usr/lib/python2.5/site-packages/MySQL_python-1.2.3c1-py2.5-linux-i686.egg', '/usr/lib/python2.5', '/usr/lib/python2.5/plat-linux2', '/usr/lib/python2.5/lib-tk', '/usr/lib/python2.5/lib-dynload', '/usr/local/lib/python2.5/site-packages', '/usr/lib/python2.5/site-packages', '/usr/lib/python2.5/site-packages/Numeric', '/usr/lib/python2.5/site-packages/PIL', '/usr/lib/python2.5/site-packages/gst-0.10', '/var/lib/python-support/python2.5', '/usr/lib/python2.5/site-packages/gtk-2.0', '/var/lib/python-support/python2.5/gtk-2.0', '/usr/lib/python2.5/site-packages/wx-2.8-gtk2-unicode']