First draft of a different solution to the reload() problem.
diff --git a/Lib/xreload.py b/Lib/xreload.py
new file mode 100644
index 0000000..ba5370e
--- /dev/null
+++ b/Lib/xreload.py
@@ -0,0 +1,136 @@
+"""Alternative to reload().
+
+This works by executing the module in a scratch namespace, and then
+patching classes, methods and functions.  This avoids the need to
+patch instances.  New objects are copied into the target namespace.
+"""
+
+import imp
+import sys
+import types
+
+
+def xreload(mod):
+    """Reload a module in place, updating classes, methods and functions.
+
+    Args:
+      mod: a module object
+
+    Returns:
+      The (updated) input object itself.
+    """
+    # Get the module name, e.g. 'foo.bar.whatever'
+    modname = mod.__name__
+    # Get the module namespace (dict) early; this is part of the type check
+    modns = mod.__dict__
+    # Parse it into package name and module name, e.g. 'foo.bar' and 'whatever'
+    i = modname.rfind(".")
+    if i >= 0:
+        pkgname, modname = modname[:i], modname[i+1:]
+    else:
+        pkgname = None
+    # Compute the search path
+    if pkgname:
+        # We're not reloading the package, only the module in it
+        pkg = sys.modules[pkgname]
+        path = pkg.__path__  # Search inside the package
+    else:
+        # Search the top-level module path
+        pkg  = None
+        path = None  # Make find_module() uses the default search path
+    # Find the module; may raise ImportError
+    (stream, filename, (suffix, mode, kind)) = imp.find_module(modname, path)
+    # Turn it into a code object
+    try:
+        # Is it Python source code or byte code read from a file?
+        # XXX Could handle frozen modules, zip-import modules
+        if kind not in (imp.PY_COMPILED, imp.PY_SOURCE):
+            # Fall back to built-in reload()
+            return reload(mod)
+        if kind == imp.PY_SOURCE:
+            source = stream.read()
+            code = compile(source, filename, "exec")
+        else:
+            code = marshal.load(stream)
+    finally:
+        if stream:
+            stream.close()
+    # Execute the code im a temporary namespace; if this fails, no changes
+    tmpns = {}
+    exec(code, tmpns)
+    # Now we get to the hard part
+    oldnames = set(modns)
+    newnames = set(tmpns)
+    # Add newly introduced names
+    for name in newnames - oldnames:
+        modns[name] = tmpns[name]
+    # Delete names that are no longer current
+    for name in oldnames - newnames - {"__name__"}:
+        del modns[name]
+    # Now update the rest in place
+    for name in oldnames & newnames:
+        modns[name] = _update(modns[name], tmpns[name])
+    # Done!
+    return mod
+
+
+def _update(oldobj, newobj):
+    """Update oldobj, if possible in place, with newobj.
+
+    If oldobj is immutable, this simply returns newobj.
+
+    Args:
+      oldobj: the object to be updated
+      newobj: the object used as the source for the update
+
+    Returns:
+      either oldobj, updated in place, or newobj.
+    """
+    if type(oldobj) is not type(newobj):
+        # Cop-out: if the type changed, give up
+        return newobj
+    if hasattr(newobj, "__reload_update__"):
+        # Provide a hook for updating
+        return newobj.__reload_update__(oldobj)
+    if isinstance(newobj, types.ClassType):
+        return _update_class(oldobj, newobj)
+    if isinstance(newobj, types.FunctionType):
+        return _update_function(oldobj, newobj)
+    if isinstance(newobj, types.MethodType):
+        return _update_method(oldobj, newobj)
+    # XXX Support class methods, static methods, other decorators
+    # Not something we recognize, just give up
+    return newobj
+
+
+def _update_function(oldfunc, newfunc):
+    """Update a function object."""
+    oldfunc.__doc__ = newfunc.__doc__
+    oldfunc.__dict__.update(newfunc.__dict__)
+    oldfunc.func_code = newfunc.func_code
+    oldfunc.func_defaults = newfunc.func_defaults
+    # XXX What else?
+    return oldfunc
+
+
+def _update_method(oldmeth, newmeth):
+    """Update a method object."""
+    # XXX What if im_func is not a function?
+    _update_function(oldmeth.im_func, newmeth.im_func)
+    return oldmeth
+
+
+def _update_class(oldclass, newclass):
+    """Update a class object."""
+    # XXX What about __slots__?
+    olddict = oldclass.__dict__
+    newdict = newclass.__dict__
+    oldnames = set(olddict)
+    newnames = set(newdict)
+    for name in newnames - oldnames:
+        setattr(oldclass, name, newdict[name])
+    for name in oldnames - newnames:
+        delattr(oldclass, name)
+    for name in oldnames & newnames - {"__dict__", "__doc__"}:
+        setattr(oldclass, name,  newdict[name])
+    return oldclass