That is really strange, because PKey has had sign_init method since 2004. That code works for me (just tested). What version of M2Crypto are you using? I'd advice you upgrade to 0.15 if possible. See
http://wiki.osafoundation.org/bin/view/Projects/MeTooCrypto -- Heikki Toivonen -- http://mail.python.org/mailman/listinfo/python-list