Not much new. The error is:
src/lxml/lxml.etree.c:161954: fatal error: error writing to -: Broken pipe
In my machine the compilation of this file (part of lxml) requires a lot of time and memory.
Try with as much memory as possible (close all applications) from the terminal run only:
workon lernanta
pip install lxml
If it fails, check "ulimit -a" to see if your bash has limits and if there are try with ulimit to increase them (see man ulimit) and run again these commands, you could also try with sudo since the root user could have greather limits.
If the compilation still fails you could try to use a precompiled lxml, you can dowload one egg for your architecture from:
http://pypi.python.org/pypi/lxml/2.3beta1
However I don't know where you have to install it, since it should be inside the virtual environment for lernanta, in my case it is in my home directory it goes at ~/.virtualenvs/lernanta/lib/python2.6/site-packages/lxml-2.3beta1-py2.6.egg-info/ and ~/.virtualenvs/lernanta/lib/python2.6/site-packages/lxml/
I think you would have to find where should be the location, and install there.
Not sure, probably If you download http://pypi.python.org/packages/2.5/l/lxml/lxml-2.3beta1-py2.5-macosx-10.3-i386.egg#md5=3917603babc9cc0b1c27df288dab22ec you would run something like
sh xml-2.3beta1-py2.5-macosx-10.3-i386.egg --prefix=~/.virtualenvs/lernanta/lib/python2.6/site-packages
Probably the instructions at http://peak.telecommunity.com/DevCenter/EasyInstall#custom-installation-locations could be useful also.