a couple bugfixes
I realize you're probably not interested in maintaining this program any more, but just in case: I downloaded a copy and made a couple changes to make it work better. First, changed the print statements to Python3 (actually, to stderr.write(...) statements).
More importantly, I added code to chop off comments (which were being interpreted as if they were makefile code), and to escape '%'. I'm not sure why the latter is necessary, but without it "%.foo" turns into something like "%27". The line in question was
line_to_emit += line
and is now
line_to_emit += line.split('#')[0].replace('%', '\%')
There are some other things going on that I haven't been able to pin down, but as you say, it was experimental...