Is there a source code level debugger with breakpoints, single-stepping, etc.?

Yes.

The pdb module is a simple but adequate console-mode debugger for Python. It is part of the standard Python library, and is documented in the Library Reference Manual. You can also write your own debugger by using the code for pdb as an example.

The IDLE interactive development environment, which is part of the standard Python distribution, includes a graphical debugger. There is documentation for the IDLE debugger at http://www.python.org/idle/doc/idle2.html