As always, use the package manager:
sudo apt-get install python-imaging
It'll deal with it all for you. The packages are available.
Manually installing, in any Linux distro, is a wasted endeavour, unless the packages really don't exist. Package maintainers spend time ensuring that the package works and installs correctly, there is no point duplicating their effort. Especially not to manually install something that then doesn't have the advantages of a package - no automatic updating, no easy removal, etc...
Try reinstalling from scratch:
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Look for lib/pythonXX/site-packages/PIL. Delete all this directory along with the file PIL.pth. This should completely remove te package.
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Unpack the PIL installation files from the *tar.gz you downloaded.
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Add the directories where your jpeg library is, with add_directory(...) as you did before. (Use ldconfig -P | grep jpeg to find where the libraries are).
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Retry python setup.py build, then python setup.py install. Test it.
I found it to be a combination of the two above when installing with a requirements.txt on Ubuntu. I'm using Vagrant to run a chef script, and found this approach works best for me:
First, I use a bash script to setup PIL:
#!/usr/bin/env bash
sudo apt-get build-dep python-imaging
sudo ln -s -f /usr/lib/`uname -i`-linux-gnu/libfreetype.so /usr/lib/
sudo ln -s -f /usr/lib/`uname -i`-linux-gnu/libjpeg.so /usr/lib/
sudo ln -s -f /usr/lib/`uname -i`-linux-gnu/libz.so /usr/lib/