After making games with XNA, I wanted to broaden my horizon by working with python. I know XNA is supposedly easy to distribute; however, i'm not sure if a game made with pygame compiled with py2exe could be submitted to steam? My overall question is...How would I submit a game made with pygame to steam?
That it is Python, assembly or XNA doesn't really matter for Steam, AFAIK. There are two general ways to distribute games through Steam, contacting the Steam team (I just love saying that) themselves, or getting accepted through the Green Light program.
Seeing that you aren't a AAA game dev team, the latter would probably be the best option.