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The dependencies in setup.py were not being processed if beaker package was not already installed.
This was because setup.py depended on cork. Hence, when running pip, a compile of cork was initiated which failed because beaker package was not present.
I've removed the dependency and now bottle-cork can pip install, which means it finally works on Heroku. (The reason it failed on Heroku was because requirements.txt processes dependencies from github before pypy packages. This is apparently a limitation of pip.) I was using my bottle-cork@current fork for testing)
So, 'forcing' installation of beaker and pycrypt before bottle-cork in requirements.txt by putting them in the right order did not work.