<p>I would like to generate documentation for a RESTful web service API that is written in Python. Ideally it would look like Yahoo's RESTful web service docs. Does anyone have any ideas or references?</p>

Unfortunately I don't know anything specific that will help you in Python specifically -- However just as points of reference, you might take a peak at the WADL specification that the JAX-RS java spec is using --
https://wadl.dev.java.net/
-- Additionally, there is a xslt that will transform the wadl into html --
http://www.mnot.net/webdesc/
They use the yahoo REST API's as examples.