I haven't gone through all of the thread.
But I'm using routes with GAE.
I'm using latest version of web2py. 

My routes is 

routes_in = (
                   (r'.*:/favicon.ico', r'/init/static/favicon.ico'),
                   (r'.*:/robots.txt', r'/init/static/robots.txt'),
                 )

It's working without any problem at all. I've used it before (with version 
1.6 or 1.7)

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