Try running following command on the terminal:
> whereis python
This will tell you where your python is installed. For example it could be /usr/local/bin for example. Once you get the correct path you can refer complete path in the system command.
If the above doesn't work, try doing this on terminal
python
>>> import lxml
>>> print lxml
<module 'lxml' from '<your_path>/site-packages/lxml-3.2.3-py2.7.egg/lxml/__init__.pyc'>
You should get a response similar to above. This will tell you from where you lxml package is being loaded. Based on this path you can check what may be going wrong in loading this package.
If the above option doesn't work, you can uninstall the lxml package and then reinstall it with following option:
easy_install -Z lxml
This will give you the source code of lxml package. And you can copy its code your source directory, and work further. But I would suggest this to be the last resort to try.