foo.py

def bar1():
    for x in range(4):
        if x == 0:
            pass
        else:
            # coverage thinks this line isn't covered
            continue

def bar2():
    for x in range(4):
        if x == 0:
            pass
        else:
            # any statement here in addition to the "continue" seems to cause
            # coverage to be satisfied for the entire "else" block
            True
            continue

test_foo.py

import unittest

import foo 

class TestBar(unittest.TestCase):
    def test_bar(self):
        foo.bar1() 
        foo.bar2() 

$ nosetests --with-coverage
.
Name    Stmts   Miss  Cover   Missing
-------------------------------------
foo        13      1    92%   7
----------------------------------------------------------------------
Ran 1 test in 0.008s

OK