python's zipfile doesn't support compression type 6 (imploded) so its simply not going to work. In the first case, that's obvious from the error. In the second case, things are worse. The parameter for extractfile is an alternate unzip directory. Since you gave it the name of your zip file, a directory of the same name can't be found and zipfile gives up before getting to the not-supported problem.
Make sure you can do this with 7z on the command line, try implementing subprocess again and ask for help on that technique if you need it.
Here's a script that will look for 7z in the usual places:
import os
import sys
import subprocess
from glob import glob
print 'python version:', sys.version
subprocess.call('ver', shell=True)
print
if os.path.exists(r'C:\Program Files\7-Zip'):
print 'have standard 7z install'
if '7-zip' in os.environ['PATH'].lower():
print '...and its in the path'
else:
print '...but its not in the path'
print
print 'find in path...'
found = 0
for p in os.environ['PATH'].split(os.path.pathsep):
candidate = os.path.join(p, '7z.*')
for fn in glob(candidate):
print ' found', fn
found += 1
print
if found:
print '7z located, attempt run'
subprocess.call(['7z'])
else:
print '7z not found'