Chinese Characters in the URL produce a "ProgrammingError" and no page returned

What steps will reproduce the problem?

Goto a URL with chinese in it e.g.  http://localhost:8080/dict/%E6%BF%9F
Which was working fine for the previous version of dev_appserver.py

What is the expected output? What do you see instead?

Expected output at: http://xs-ace-coda-a.appspot.com/dict/%E6%BF%9F

Instead I get a "HTTP Error 500" and the following output from dev_appserver.py:
<<
ProgrammingError('You must not use 8-bit bytestrings unless you use a 
text_factory that can interpret 8-bit bytestrings (like text_factory = str). It 
is highly recommended that you instead just switch your application to Unicode 
strings.',)
Traceback (most recent call last):
  File "/Users/elliott/go/google_appengine/lib/cherrypy/cherrypy/wsgiserver/wsgiserver2.py", line 1302, in communicate
    req.respond()
  File "/Users/elliott/go/google_appengine/lib/cherrypy/cherrypy/wsgiserver/wsgiserver2.py", line 831, in respond
    self.server.gateway(self).respond()
  File "/Users/elliott/go/google_appengine/lib/cherrypy/cherrypy/wsgiserver/wsgiserver2.py", line 2115, in respond
    response = self.req.server.wsgi_app(self.env, self.start_response)
  File "/Users/elliott/go/google_appengine/google/appengine/tools/devappserver2/wsgi_server.py", line 230, in __call__
    return app(environ, start_response)
  File "/Users/elliott/go/google_appengine/google/appengine/tools/devappserver2/server.py", line 1114, in __call__
    return self._handle_request(environ, start_response)
  File "/Users/elliott/go/google_appengine/google/appengine/tools/devappserver2/server.py", line 512, in _handle_request
    http_version=http_version)
  File "/Users/elliott/go/google_appengine/google/appengine/api/apiproxy_stub.py", line 160, in WrappedMethod
    return method(self, *args, **kwargs)
  File "/Users/elliott/go/google_appengine/google/appengine/api/logservice/logservice_stub.py", line 151, in start_request
    host, start_time, method, resource, http_version))
ProgrammingError: You must not use 8-bit bytestrings unless you use a 
text_factory that can interpret 8-bit bytestrings (like text_factory = str). It 
is highly recommended that you instead just switch your application to Unicode 
strings.
>>

What version of the product are you using? On what operating system?

VERSION file <<release: "1.7.6"
timestamp: 1360882848
api_versions: ['1']
supported_api_versions:
  python:
    api_versions: ['1']
  python27:
    api_versions: ['1']
  go:
    api_versions: ['go1']
>>
OSX 10.6.8

Please provide any additional information below.

Since I hope to develop bilingual software, this is a show-stopper for me...

Original issue reported on code.google.com by Elliott....@gmail.com on 23 Mar 2013 at 8:19

google-code-export / appengine-devappserver2-experiment

Chinese Characters in the URL produce a "ProgrammingError" and no page returned #58