It's a simple fix just to edit the /bin/activate file from the virtualenv directory and add the following lines,
_OLD_VIRTUAL_PATH="$PATH"
PATH="$VIRTUAL_ENV/bin:$PATH"
PATH="$PATH:/usr/local/mysql/bin/"
export PATH
That's it, just make sure you match your paths to your own configuration. Now MySQL-python installs under virtualenv as normal.
Link: http://glynjackson.org/weblog/entry/fix-vertualenv-environmenterror-mysql_config-not-found.html
