The Inline::Python documentation shows the following approach to using it:

use Inline Python;
 
...
 
__END__
__Python__
 
Python source code goes here.
[download]

In the past, I had problems with the weirdo option parsing that Inline uses, so maybe if the above approach works for you, you need to play around with the order of the options?

The error message sounds a bit weird - it seems that Inline sees the complete DATA section as one line. Maybe insert some more newlines and make sure that the newline style used in your Perl code matches the newline style in your Python code?! Maybe you have trailing whitespace (or Windows newlines?!) at the end of the __Python__ string and Inline doesn't know how to treat that?