Eventually I came up with this

import time
from os import stat
from os.path import abspath
from stat import ST_SIZE

class LogTail:
    def __init__(self, logfile):
        self.logfile = abspath(logfile)
        self.f = open(self.logfile,"r")
        file_len = stat(self.logfile)[ST_SIZE]
        self.f.seek(file_len)
        self.pos = self.f.tell()
    def _reset(self):
        self.f.close()
        self.f = open(self.logfile, "r")
        self.pos = self.f.tell()
    def tail(self):
        while 1:
            self.pos = self.f.tell()
            line = self.f.readline()
            if not line:
                if stat(self.logfile)[ST_SIZE] < self.pos:
                    self._reset()
                else:
                    time.sleep(1)
                    self.f.seek(self.pos)
            else:
                """print, return or otherwise manipulate
                the tailed line"""
                print line

Maybe it's a too much overhead to check each time for file size, but you get the general idea.

So anyways here's a usage example

tail = LogTail("/var/log/messages")
tail.tail()

This will print out any new line appended to /var/log/messages file. If the file gets truncated or log rotated, class will detect it and will return to the start.