diff --git a/lib/ansible/connection.py b/lib/ansible/connection.py
index 6d349388193..5243b708f7b 100644
--- a/lib/ansible/connection.py
+++ b/lib/ansible/connection.py
@@ -164,7 +164,7 @@ class ParamikoConnection(object):
 
         stdin = chan.makefile('wb', bufsize)
         stdout = chan.makefile('rb', bufsize)
-        stderr = chan.makefile_stderr('rb', bufsize)        # stderr goes to stdout when using a pty, so this will never output anything.
+        stderr = ''  # stderr goes to stdout when using a pty, so this will never output anything.
         return stdin, stdout, stderr
 
     def put_file(self, in_path, out_path):
diff --git a/test/TestRunner.py b/test/TestRunner.py
index 74e7952e86b..be59be3b11b 100644
--- a/test/TestRunner.py
+++ b/test/TestRunner.py
@@ -10,9 +10,9 @@ import os
 import shutil
 import time
 try:
-   import json
+    import json
 except:
-   import simplejson as json
+    import simplejson as json
 
 from nose.plugins.skip import SkipTest
 
@@ -25,202 +25,206 @@ def get_binary(name):
 
 class TestRunner(unittest.TestCase):
 
-   def setUp(self):
-       self.user = getpass.getuser()
-       self.runner = ansible.runner.Runner(
-           module_name='ping',
-           module_path='library/',
-           module_args='',
-           remote_user=self.user,
-           remote_pass=None,
-           host_list='test/ansible_hosts',
-           timeout=5,
-           forks=1,
-           background=0,
-           pattern='all',
-       )
-       self.cwd = os.getcwd()
-       self.test_dir = os.path.join(self.cwd, 'test')
-       self.stage_dir = self._prepare_stage_dir()
+    def setUp(self):
+        self.user = getpass.getuser()
+        self.runner = ansible.runner.Runner(
+            module_name='ping',
+            module_path='library/',
+            module_args='',
+            remote_user=self.user,
+            remote_pass=None,
+            host_list='test/ansible_hosts',
+            timeout=5,
+            forks=1,
+            background=0,
+            pattern='all',
+        )
+        self.cwd = os.getcwd()
+        self.test_dir = os.path.join(self.cwd, 'test')
+        self.stage_dir = self._prepare_stage_dir()
 
-   def _prepare_stage_dir(self):
-       stage_path = os.path.join(self.test_dir, 'test_data')
-       if os.path.exists(stage_path):
-           shutil.rmtree(stage_path, ignore_errors=False)
-           assert not os.path.exists(stage_path)
-       os.makedirs(stage_path)
-       assert os.path.exists(stage_path)
-       return stage_path
+    def _prepare_stage_dir(self):
+        stage_path = os.path.join(self.test_dir, 'test_data')
+        if os.path.exists(stage_path):
+            shutil.rmtree(stage_path, ignore_errors=False)
+            assert not os.path.exists(stage_path)
+        os.makedirs(stage_path)
+        assert os.path.exists(stage_path)
+        return stage_path
 
-   def _get_test_file(self, filename):
-       # get a file inside the test input directory
-       filename = os.path.join(self.test_dir, filename)
-       assert os.path.exists(filename)
-       return filename
- 
-   def _get_stage_file(self, filename):
-       # get a file inside the test output directory
-       filename = os.path.join(self.stage_dir, filename)
-       return filename
+    def _get_test_file(self, filename):
+        # get a file inside the test input directory
+        filename = os.path.join(self.test_dir, filename)
+        assert os.path.exists(filename)
+        return filename
 
-   def _run(self, module_name, module_args, background=0):
-       ''' run a module and get the localhost results '''
-       self.runner.module_name = module_name
-       args = ' '.join(module_args)
-       print "DEBUG: using args=%s" % args
-       self.runner.module_args = args
-       self.runner.background  = background
-       results = self.runner.run()
-       # when using nosetests this will only show up on failure
-       # which is pretty useful
-       print "RESULTS=%s" % results
-       assert "127.0.0.2" in results['contacted']
-       return results['contacted']['127.0.0.2'] 
+    def _get_stage_file(self, filename):
+        # get a file inside the test output directory
+        filename = os.path.join(self.stage_dir, filename)
+        return filename
 
-   def test_ping(self):
-       result = self._run('ping',[])
-       assert "ping" in result
+    def _run(self, module_name, module_args, background=0):
+        ''' run a module and get the localhost results '''
+        self.runner.module_name = module_name
+        args = ' '.join(module_args)
+        print "DEBUG: using args=%s" % args
+        self.runner.module_args = args
+        self.runner.background = background
+        results = self.runner.run()
+        # when using nosetests this will only show up on failure
+        # which is pretty useful
+        print "RESULTS=%s" % results
+        assert "127.0.0.2" in results['contacted']
+        return results['contacted']['127.0.0.2']
 
-   def test_facter(self):
-       if not get_binary("facter"):
-           raise SkipTest
-       result = self._run('facter',[])
-       assert "hostname" in result
+    def test_ping(self):
+        result = self._run('ping', [])
+        assert "ping" in result
 
-   # temporarily disbabled since it occasionally hangs
-   # ohai's fault, setup module doesn't actually run this
-   # to get ohai's "facts" anyway
-   #
-   #def test_ohai(self):
-   #    if not get_binary("facter"):
-   #            raise SkipTest
-   #    result = self._run('ohai',[])
-   #    assert "hostname" in result
+    def test_facter(self):
+        if not get_binary("facter"):
+            raise SkipTest
+        result = self._run('facter', [])
+        assert "hostname" in result
 
-   def test_copy(self):
-       # test copy module, change trigger, etc
-       pass
+    # temporarily disbabled since it occasionally hangs
+    # ohai's fault, setup module doesn't actually run this
+    # to get ohai's "facts" anyway
+    #
+    #def test_ohai(self):
+    #    if not get_binary("facter"):
+    #            raise SkipTest
+    #    result = self._run('ohai',[])
+    #    assert "hostname" in result
 
-   def test_copy(self):
-       input = self._get_test_file('sample.j2')
-       output = self._get_stage_file('sample.out')
-       assert not os.path.exists(output)
-       result = self._run('copy', [
-           "src=%s" % input,
-           "dest=%s" % output,
-       ])
-       assert os.path.exists(output)
-       data_in = file(input).read()
-       data_out = file(output).read()
-       assert data_in == data_out
-       assert 'failed' not in result
-       assert result['changed'] == True
-       assert 'md5sum' in result
-       result = self._run('copy', [
-           "src=%s" % input,
-           "dest=%s" % output,
-       ])
-       assert result['changed'] == False
+    def test_copy(self):
+        # test copy module, change trigger, etc
+        input_ = self._get_test_file('sample.j2')
+        output = self._get_stage_file('sample.out')
+        assert not os.path.exists(output)
+        result = self._run('copy', [
+            "src=%s" % input_,
+            "dest=%s" % output,
+        ])
+        assert os.path.exists(output)
+        data_in = file(input_).read()
+        data_out = file(output).read()
+        assert data_in == data_out
+        assert 'failed' not in result
+        assert result['changed'] == True
+        assert 'md5sum' in result
+        result = self._run('copy', [
+            "src=%s" % input_,
+            "dest=%s" % output,
+        ])
+        assert result['changed'] == False
 
-   def test_template(self):
-       input = self._get_test_file('sample.j2')
-       metadata = self._get_test_file('metadata.json')
-       output = self._get_stage_file('sample.out')
-       result = self._run('template', [
-           "src=%s" % input,
-           "dest=%s" % output,
-           "metadata=%s" % metadata
-       ])
-       assert os.path.exists(output)
-       out = file(output).read()
-       assert out.find("duck") != -1
-       assert result['changed'] == True
-       assert 'md5sum' in result
-       assert 'failed' not in result
-       result = self._run('template', [
-           "src=%s" % input,
-           "dest=%s" % output,
-           "metadata=%s" % metadata
-       ])
-       assert result['changed'] == False
+    def test_template(self):
+        input_ = self._get_test_file('sample.j2')
+        metadata = self._get_test_file('metadata.json')
+        output = self._get_stage_file('sample.out')
+        result = self._run('template', [
+            "src=%s" % input_,
+            "dest=%s" % output,
+            "metadata=%s" % metadata
+        ])
+        assert os.path.exists(output)
+        out = file(output).read()
+        assert out.find("duck") != -1
+        assert result['changed'] == True
+        assert 'md5sum' in result
+        assert 'failed' not in result
+        result = self._run('template', [
+            "src=%s" % input_,
+            "dest=%s" % output,
+            "metadata=%s" % metadata
+        ])
+        assert result['changed'] == False
 
-   def test_command(self):
-   
-       # test command module, change trigger, etc
-       result = self._run('command', [ "/bin/echo", "hi" ])
-       assert "failed" not in result
-       assert "msg" not in result
-       assert result['rc'] == 0
-       assert result['stdout'] == 'hi'
-       assert result['stderr'] == ''
-   
-       result = self._run('command', [ "/bin/false" ])
-       assert result['rc'] == 1
-       assert 'failed' not in result
-   
-       result = self._run('command', [ "/usr/bin/this_does_not_exist", "splat" ]) 
-       assert 'msg' in result
-       assert 'failed' in result
-       assert 'rc' not in result
+    def test_command(self):
+        # test command module, change trigger, etc
+        result = self._run('command', [ "/bin/echo", "hi" ])
+        assert "failed" not in result
+        assert "msg" not in result
+        assert result['rc'] == 0
+        assert result['stdout'] == 'hi'
+        assert result['stderr'] == ''
 
-       result = self._run('shell', [ "/bin/echo", "$HOME" ])
-       assert 'failed' not in result
-       assert result['rc'] == 0 
-   
+        result = self._run('command', [ "/bin/false" ])
+        assert result['rc'] == 1
+        assert 'failed' not in result
 
-   def test_setup(self):
-       output = self._get_stage_file('output.json')
-       result = self._run('setup', [ "metadata=%s" % output, "a=2", "b=3", "c=4" ])
-       assert 'failed' not in result
-       assert 'md5sum' in result
-       assert result['changed'] == True
-       outds = json.loads(file(output).read())
-       assert outds['c'] == '4'
-       # not bothering to test change hooks here since ohai/facter results change
-       # almost every time so changed is always true, this just tests that
-       # rewriting the file is ok
-       result = self._run('setup', [ "metadata=%s" % output, "a=2", "b=3", "c=4" ])
-       print "RAW RESULT=%s" % result
-       assert 'md5sum' in result
+        result = self._run('command', [ "/usr/bin/this_does_not_exist", "splat" ])
+        assert 'msg' in result
+        assert 'failed' in result
+        assert 'rc' not in result
 
-   def test_async(self):
-       # test async launch and job status
-       # of any particular module
-       result = self._run('command', [ get_binary("sleep"), "3" ], background=20)
-       assert 'ansible_job_id' in result
-       assert 'started' in result
-       jid = result['ansible_job_id']
-       # no real chance of this op taking a while, but whatever
-       time.sleep(5)
-       # CLI will abstract this (when polling), but this is how it works internally
-       result = self._run('async_status', [ "jid=%s" % jid ])
-       # TODO: would be nice to have tests for supervisory process
-       # killing job after X seconds
-       assert 'finished' in result
-       assert 'failed' not in result
-       assert 'rc' in result
-       assert 'stdout' in result
-       assert result['ansible_job_id'] == jid
+        result = self._run('shell', [ "/bin/echo", "$HOME" ])
+        assert 'failed' not in result
+        assert result['rc'] == 0
 
-   def test_fetch(self):
-       input = self._get_test_file('sample.j2')
-       output = os.path.join(self.stage_dir, '127.0.0.2', input)
-       result = self._run('fetch', [ "src=%s" % input, "dest=%s" % self.stage_dir ])
-       assert os.path.exists(output)
-       assert open(input).read() == open(output).read()
+    def test_large_output(self):
+        # Ensure reading a large amount of output from a command doesn't hang.
+        result = self._run('command', [ "/bin/cat", "/usr/share/dict/words" ])
+        assert "failed" not in result
+        assert "msg" not in result
+        assert result['rc'] == 0
+        assert len(result['stdout']) > 100000
+        assert result['stderr'] == ''
 
-   def test_yum(self):
-       if not get_binary("yum"):
-           raise SkipTest
-       result = self._run('yum', [ "list=repos" ])
-       assert 'failed' not in result
+    def test_setup(self):
+        output = self._get_stage_file('output.json')
+        result = self._run('setup', [ "metadata=%s" % output, "a=2", "b=3", "c=4" ])
+        assert 'failed' not in result
+        assert 'md5sum' in result
+        assert result['changed'] == True
+        outds = json.loads(file(output).read())
+        assert outds['c'] == '4'
+        # not bothering to test change hooks here since ohai/facter results change
+        # almost every time so changed is always true, this just tests that
+        # rewriting the file is ok
+        result = self._run('setup', [ "metadata=%s" % output, "a=2", "b=3", "c=4" ])
+        print "RAW RESULT=%s" % result
+        assert 'md5sum' in result
 
-   def test_git(self):
-       # TODO: tests for the git module
-       pass
+    def test_async(self):
+        # test async launch and job status
+        # of any particular module
+        result = self._run('command', [ get_binary("sleep"), "3" ], background=20)
+        assert 'ansible_job_id' in result
+        assert 'started' in result
+        jid = result['ansible_job_id']
+        # no real chance of this op taking a while, but whatever
+        time.sleep(5)
+        # CLI will abstract this (when polling), but this is how it works internally
+        result = self._run('async_status', [ "jid=%s" % jid ])
+        # TODO: would be nice to have tests for supervisory process
+        # killing job after X seconds
+        assert 'finished' in result
+        assert 'failed' not in result
+        assert 'rc' in result
+        assert 'stdout' in result
+        assert result['ansible_job_id'] == jid
 
-   def test_service(self):
-       # TODO: tests for the service module
-       pass
+    def test_fetch(self):
+        input_ = self._get_test_file('sample.j2')
+        output = os.path.join(self.stage_dir, '127.0.0.2', input_)
+        result = self._run('fetch', [ "src=%s" % input_, "dest=%s" % self.stage_dir ])
+        assert os.path.exists(output)
+        assert open(input_).read() == open(output).read()
+
+    def test_yum(self):
+        if not get_binary("yum"):
+            raise SkipTest
+        result = self._run('yum', [ "list=repos" ])
+        assert 'failed' not in result
+
+    def test_git(self):
+        # TODO: tests for the git module
+        pass
+
+    def test_service(self):
+        # TODO: tests for the service module
+        pass