I have a package I am developing. This package is already installed as an egg file parked in the site-packages directory, egg path added to easy-install.pth. 
I now realized I have a bug in the package, so I invoked python setup.py develop to hook up the development dir. The path of the source dir is correctly added to easy-install.pth, but it's added latest, meaning that the already installed egg will be chosen and imported first with I issue import mypackage. 
How can I have the development hook override the already installed package ? 
Eventually, if I am doing it wrong, please explain what's the proper strategy to solve this use case.
I would use a virtual environment, that is, an isolated Python installation that is not affected by distributions installed system-wide.  See virtualenv and virtualenvwrapper on PyPI.
python setup.py develop to override installed version