The problem is not in distlib. The problem is in pip. Steps I followed to fix the issue :
1) Uninstalled python3-pip (1.5.6-5 debian/sid) package. 2) Used easy_install to install latest pip (6.1.1). 3) Used latest pip to install virtualenv (12.1.1). Deb/sid packages may need update/fix otherwise pip & virtualenv can't be used effectively. - Archan
