Leave at most max_dup consecutive duplicate elements in a list
This is a one-liner using the features of the itertools module. I'll try to show how you might find this via a step-by-step transformation.


When a function returns a list of items, it's often more convenient (in Python) to refactor it so that it generates the items one at a time using the yield statement. This has some advantages: (i) if the caller is also processing the items one at a time, then you don't need to allocate the whole list in memory; (ii) the first item becomes available immediately, without having to wait for all the items; (iii) if the items are arriving from a file or some other form of I/O, you may be able to process early items in parallel with loading later ones; (iv) a generator can operate on a potentially infinite stream of items without running out of memory.

def remove_excessive_duplicates(iterable, dup='', max_dup=2):
    """Generate items in iterable, but at most max_dup of any consecutive
    sequence of items equal to dup.

    &gt;&gt;&gt; input = [1, 0, 0, 0, 2, 0, 3, 0, 0, 0, 0, 0, 4, 0]
    &gt;&gt;&gt; list(remove_excessive_duplicates(input, dup=0))
    [1, 0, 0, 2, 0, 3, 0, 0, 4, 0]

    """
    count = 0
    for item in iterable:
        if item == dup:
            count += 1 
        else:
            count = 0
        if count &lt;= max_dup:
            yield item


(I've also taken the opportunity of adding a docstring and a doctest, and improving some of the variable names.)
What's going on here is that we are finding groups of identical items in the input, and for this Python provides itertools.groupby:

for key, group in groupby(iterable):
    if key == dup:
        count = 0
        for item in group:
            if count &gt;= max_dup:
                break
            yield item
            count += 1
    else:
        yield from group


This has the advantage that we don't need to maintain the running count in the else case, saving some work.
In the if case, we want to yield at most max_dup items from the iterable group. This can be done using itertools.islice:

for key, group in groupby(iterable):
    if key == dup:
        yield from islice(group, max_dup)
    else:
        yield from group

We can factor out the repeated yield from:

for key, group in groupby(iterable):
    yield from islice(group, max_dup) if key == dup else group

That would a sensible place to stop. But to make this into a single expression we can note that the effect of this code is that for each group in the iterable, we construct an output iterable (either islice(...) or group, depending on the key), and the result consists of the concatenation of these iterables. Concatenating a bunch of iterables is a job for the obscurely named itertools.chain.from_iterable:

return chain.from_iterable(islice(group, max_dup) if key == dup else group
                           for key, group in groupby(iterable))