Setup.py not respecting package_dir during develop

[disappearedng]

This is my current project setup:

..
├── README.md
├── build
│ ├── bdist.macosx-10.8-intel
│ └── lib
├── dist
│ └── giordano-0.1-py2.7.egg
├── giordano.egg-info
│ ├── PKG-INFO
│ ├── SOURCES.txt
│ ├── dependency_links.txt
│ ├── not-zip-safe
│ └── top_level.txt
├── requirements.txt
├── setup.py
├── src
│ ├── giordano
│ └── spider
├── test.txt
└── venv
├── bin
├── include
├── lib
└── share

And this is my setup file:

from setuptools import setup
setup(name='giordano',
version='0.1',
packages=['giordano'],
package_dir={'giordano': 'src/giordano'},
zip_safe=False)

When I do python setup.py install, I am able to `import giordano` in my code without problems.

However, when I am doing python setup.py develop, this is the console output:

[venv] fixSetup$ python setup.py develop
running develop
running egg_info
writing giordano.egg-info/PKG-INFO
writing top-level names to giordano.egg-info/top_level.txt
writing dependency_links to giordano.egg-info/dependency_links.txt
reading manifest file 'giordano.egg-info/SOURCES.txt'
writing manifest file 'giordano.egg-info/SOURCES.txt'
running build_ext
Creating /Users/blah/Dropbox/projects/Giordano/venv/lib/python2.7/site-packages/giordano.egg-link (link to .)
Removing giordano 0.1 from easy-install.pth file
Adding giordano 0.1 to easy-install.pth file

Installed /Users/blah/Dropbox/projects/Giordano
Processing dependencies for giordano==0.1
Finished processing dependencies for giordano==0.1

This is what the .egg.link looks like:

/Users/blah/Dropbox/projects/Giordano
..

I can no longer `import giordano` in my code now.

**If I `touch src/__init__.py`, I am able to `from src import giordano` anywhere outside of this directory. So I am 100% certain that the egg is pointing to here rather than what package_dir specified.**

Any ideas why develop is not respecting package_dir?