Fixing the TemplateDoesNotExist error AppEngine/Django 1.2

When I converted my blogging application from Django 0.96 templates to 1.2, I encountered three problems that set me back a few days: my custom template tag libraries stopped working, all of the output had its HTML content escaped and all of my templates that used extends or include broke. I described how I resolved the first two issues in my most recent two posts, and I have been planning to cover the third issue, but I procrastinated.

Yesterday, a fellow AppEngine programmer posted a question on StackOverflow about the exact problem that I had fixed, so I bit the bullet and wrote up a lengthy answer describing my solution. I hope that someday soon I might have the time required to cover the subject matter more comprehensively, but for the time being, here is the question with my answer on StackOverflow.

You'll know that you care about this if your AppEngine application has suddenly started throwing TemplateDoesNotExist exceptions.