I've updated the PEP in light of my experiments and feedback.
The new API is simpler and a bit more backwards compatible.
https://www.python.org/dev/peps/pep-0651
Minor question: what's the `where` argument to `Py_CheckStackDepth()` for?
The implementation section doesn't mention how you intend to avoid the C stack for Python-to-Python calls. I have some idea, but it would be nice if you explained this a bit more. (I'm guessing you are planning to move some state from local variables into the frame object, store a "return location" (really frame object + bytecode program counter) somewhere, and then jump to the top of `_PyEval_EvalFrameDefault()`, or at least somewhere near the top. Of course this requires adjusting the various `CALL_*` opcodes to check whether the target is a Python function or not. On `RETURN_VALUE` you reverse the process, but only if the call came from the previous mechanism. Do I get a lollipop? :-)
I'm guessing you needn't do anything for generators -- IIRC recursion through `next()` is not possible, since an active generator cannot be entered recursively.