This is clearly an issue with character encodings.
In Python 3.x, all strings are Unicode. But when reading or writing a file, it will be necessary to translate the Unicode to some specific encoding.
By default, a Python source file is handled as UTF-8. I don't know exactly what characters you pasted into your source file for the blocks, but whatever it is, Python reads it as UTF-8 and it seems to work. Maybe your text editor converted to valid UTF-8 when you inserted those?
The backtrace suggests that Python is treating the input file as "Code Page 437" or the original IBM PC 8-bit character set. Is that correct?
This link shows how to set a specific decoder to handle a particular file encoding on input:
http://lucumr.pocoo.org/2010/2/11/porting-to-python-3-a-guide/
EDIT: I found a better resource:
http://docs.python.org/release/3.0.1/howto/unicode.html
And based on that, here's some sample code:
with open('mytextfile.txt', encoding='utf-8') as f:
for line in f:
print(line, end='')
Originally I had the above set to "cp437" but in a comment you said "utf-8" was correct, so I made that change to this example. I'm specifying end='' here because the input lines from the file already have a newline on the end, so we don't need print() to supply another newline.
EDIT: I found a short discussion of default encodings here:
http://docs.python.org/release/3.0.1/whatsnew/3.0.html
The important bit: "There is a platform-dependent default encoding, which on Unixy platforms can be set with the LANG environment variable (and sometimes also with some other platform-specific locale-related environment variables). In many cases, but not all, the system default is UTF-8; you should never count on this default."
So, I had thought that Python defaulted to UTF-8, but not always, it seems. Actually, from your stack backtrace, I think on your system with your LANG environment setting you are getting "cp437" as your default.
So, I learned something too by answering your question!
P.S. I changed the code example above to specify utf-8 since that is what you needed.