I wanted to recompile PIL after having installed libjpeg because it threw the decoder jpeg not available whenever I tried importing JPEG images.
So, I've downloaded libjpeg, compiled it and installed it. Then I removed the ./build folder from PIL's source cache, and recompiled it (using sudo python setup.py install). 
Now the selftest.py thing is failing with *** The _imaging C module is not installed. I have no idea what the issue is.

There are no symbol errors.
The _imaging module is importable
All dylibs are loaded properly (according to -v)
The decoder error is still there.

Does anyone know what could be causing this? I'm on OS X Lion.
What would I try:

Remove old PIL and install new it from scratch (maybe it did not override properly).
If you missed something when compiling the libjpeg, like path specifications it will not find some of the libraries, so I recomend trying MacPorts py27-pil port for PIL installation, which will place all dependancies.
Can't get PIL to work on Mac OS X