Is this how to generate a bitcoin address with python?
If the public key were correct (see Mark's answer), the code is not complete (lacks signature) and contains a hash of an ASCII hexdigest which is not correct.
I'd like to contribute with this implementation of bitcoin address from public key.
It covers the case of both uncompressed and compressed bitcoin addresses (just changing compress_pubkey boolean value).

#!/usr/bin/env python2
# https://en.bitcoin.it/wiki/Protocol_documentation#Addresses

import hashlib
import base58

# ECDSA bitcoin Public Key
pubkey = '0450863ad64a87ae8a2fe83c1af1a8403cb53f53e486d8511dad8a04887e5b23522cd470243453a299fa9e77237716103abc11a1df38855ed6f2ee187e9c582ba6'
# See 'compressed form' at https://en.bitcoin.it/wiki/Protocol_documentation#Signatures
compress_pubkey = False


def hash160(hex_str):
    sha = hashlib.sha256()
    rip = hashlib.new('ripemd160')
    sha.update(hex_str)
    rip.update( sha.digest() )
    print ( "key_hash = \t" + rip.hexdigest() )
    return rip.hexdigest()  # .hexdigest() is hex ASCII


if (compress_pubkey):
    if (ord(pubkey[-2:].decode('hex')) % 2 == 0):
        pubkey_compressed = '02'
    else:
        pubkey_compressed = '03'
    pubkey_compressed += pubkey[2:66]
    hex_str = pubkey_compressed.decode('hex')
else:
    hex_str = pubkey.decode('hex')

# Obtain key:

key_hash = '00' + hash160(hex_str)

# Obtain signature:

sha = hashlib.sha256()
sha.update( key_hash.decode('hex') )
checksum = sha.digest()
sha = hashlib.sha256()
sha.update(checksum)
checksum = sha.hexdigest()[0:8]

print ( "checksum = \t" + sha.hexdigest() )
print ( "key_hash + checksum = \t" + key_hash + ' ' + checksum )
print ( "bitcoin address = \t" + base58.b58encode( (key_hash + checksum).decode('hex') ) )