I have worked on major console games and written games in both C and C++. I also maintain an open source raytracer which I've implemented in C, C++, D, and python. So yes, I speak from experience.
Eve online is a great example of a game for which almost all game logic is in python (stackless). The "engine" is in C++, I think (not sure on that one). So I would adopt their model but use C instead of C++.
I saw a game that used Python (I think, maybe it was Ruby) and then dropped down to C for the high-performance bits and it was still slow as shit because of the Python code.
