Tried again today. Faced same thing you faced.
revant@revant-laptop:~$ sudo pip3.5 install -e ~/.bench
[sudo] password for revant:
The directory '/home/revant/.cache/pip/http' or its parent directory is not owned by the current user and the cache has been disabled. Please check the permissions and owner of that directory. If executing pip with sudo, you may want sudo's -H flag.
The directory '/home/revant/.cache/pip' or its parent directory is not owned by the current user and caching wheels has been disabled. check the permissions and owner of that directory. If executing pip with sudo, you may want sudo's -H flag.
Obtaining file:///home/revant/.bench
Requirement already satisfied: Click in /usr/local/lib/python3.5/dist-packages (from bench==4.1.0)
Requirement already satisfied: jinja2 in /usr/lib/python3/dist-packages (from bench==4.1.0)
Requirement already satisfied: virtualenv in /usr/lib/python3/dist-packages (from bench==4.1.0)
Requirement already satisfied: requests in /usr/lib/python3/dist-packages (from bench==4.1.0)
Requirement already satisfied: honcho in /usr/local/lib/python3.5/dist-packages (from bench==4.1.0)
Requirement already satisfied: psutil in /usr/lib/python3/dist-packages (from bench==4.1.0)
Requirement already satisfied: python-crontab in /usr/local/lib/python3.5/dist-packages (from bench==4.1.0)
Requirement already satisfied: semantic_version in /usr/local/lib/python3.5/dist-packages (from bench==4.1.0)
Requirement already satisfied: GitPython==0.3.2.rc1 in /usr/local/lib/python3.5/dist-packages (from bench==4.1.0)
Requirement already satisfied: MarkupSafe in /usr/lib/python3/dist-packages (from jinja2->bench==4.1.0)
Requirement already satisfied: python-dateutil in /usr/local/lib/python3.5/dist-packages (from python-crontab->bench==4.1.0)
Requirement already satisfied: gitdb>=0.5.1 in /usr/local/lib/python3.5/dist-packages (from GitPython==0.3.2.rc1->bench==4.1.0)
Requirement already satisfied: six>=1.5 in /usr/lib/python3/dist-packages (from python-dateutil->python-crontab->bench==4.1.0)
Requirement already satisfied: smmap>=0.8.5 in /usr/local/lib/python3.5/dist-packages (from gitdb>=0.5.1->GitPython==0.3.2.rc1->bench==4.1.0)
Installing collected packages: bench
Found existing installation: bench 4.1.0
Can't uninstall 'bench'. No files were found to uninstall.
Running setup.py develop for bench
Successfully installed bench
revant@revant-laptop:~$ bench init test-bench
INFO:bench.utils:virtualenv -q env -p /usr/bin/python3
INFO:bench.utils:./env/bin/pip -q install --upgrade pip
INFO:bench.utils:./env/bin/pip -q install wheel
INFO:bench.utils:./env/bin/pip -q install -e git+https://github.com/frappe/python-pdfkit.git#egg=pdfkit
INFO:bench.app:getting app frappe
INFO:bench.utils:git clone https://github.com/frappe/frappe.git --origin upstream
Cloning into 'frappe'...
remote: Counting objects: 126346, done.
remote: Compressing objects: 100% (161/161), done.
remote: Total 126346 (delta 70), reused 0 (delta 0), pack-reused 126185
Receiving objects: 100% (126346/126346), 95.64 MiB | 214.00 KiB/s, done.
Resolving deltas: 100% (94917/94917), done.
Checking connectivity... done.
installing frappe
INFO:bench.app:installing frappe
INFO:bench.utils:test-bench/env/bin/pip install -q -e test-bench/apps/frappe --no-cache-dir
Command "python setup.py egg_info" failed with error code 1 in /tmp/pip-build-lly_nux8/mysql-python/
Traceback (most recent call last):
File "/usr/local/bin/bench", line 11, in <module>
load_entry_point('bench', 'console_scripts', 'bench')()
File "/home/revant/.bench/bench/cli.py", line 40, in cli
bench_command()
File "/usr/local/lib/python3.5/dist-packages/click/core.py", line 722, in __call__
return self.main(*args, **kwargs)
File "/usr/local/lib/python3.5/dist-packages/click/core.py", line 697, in main
rv = self.invoke(ctx)
File "/usr/local/lib/python3.5/dist-packages/click/core.py", line 1066, in invoke
return _process_result(sub_ctx.command.invoke(sub_ctx))
File "/usr/local/lib/python3.5/dist-packages/click/core.py", line 895, in invoke
return ctx.invoke(self.callback, **ctx.params)
File "/usr/local/lib/python3.5/dist-packages/click/core.py", line 535, in invoke
return callback(*args, **kwargs)
File "/home/revant/.bench/bench/commands/make.py", line 19, in init
verbose=verbose, clone_from=clone_from)
File "/home/revant/.bench/bench/utils.py", line 56, in init
get_app(frappe_path, branch=frappe_branch, bench_path=path, build_asset_files=False, verbose=verbose)
File "/home/revant/.bench/bench/app.py", line 76, in get_app
install_app(app=app_name, bench_path=bench_path, verbose=verbose)
File "/home/revant/.bench/bench/app.py", line 107, in install_app
find_links=find_links))
File "/home/revant/.bench/bench/utils.py", line 130, in exec_cmd
raise CommandFailedError(cmd)
bench.utils.CommandFailedError: test-bench/env/bin/pip install -q -e test-bench/apps/frappe --no-cache-dir
revant@revant-laptop:~$
I setup environment with command following instead it sets up v3 bench
bench setup env