This does seem like a case of double-encoding; I don't have much experience with Python, but try adjusting the MySQL connection settings as per the advice at http://tahpot.blogspot.com/2005/06/mysql-and-python-and-unicode.html.
I added set names utf8 to my php data insertion sequence, and now in a Python shell the feared ndash shows up as \x96. This renders correctly when read and output through Django.
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