I had a nice discussion with my project supervisor, Seth Lemons, a day back, during which we came up with a more clear strategy of how to go about achieving our goals (also thanks to Titus for his feedback). This also lead to a few modifications to the initial plan that I had proposed at the time of proposal submission. I think it's a good idea to document the strategy we came up with so we have it as a reference here to point to later on:

1. I am going to start with making C coverage analysis work for Python 2.6. The generic C coverage tool I've decided to use for this purpose is Gcov. I think it makes sense to first manually put Gcov to use with Python for the coverage analysis.
2. Next comes making figleaf generate a combined C + Python code coverage analysis report, by integrating the C coverage using Gcov with figleaf.
3. The part up till this point is for Python 2.6 version. So to migrate it to Py3k, I'll need to port figleaf to Py3k. A port of figleaf for Py3k is already available in a somewhat unmaintained form, developed by the author of figleaf (Titus Brown) himself. So I hope this task shouldn't be a tough one.
4. Once the above parts are completed, I can move to making the C code coverage working with Py3k again using Gcov.
5. A goal of the project was to increase the code coverage by writing new test cases as well. This task can go on in parallel during all of the above four phases of the project.

The decision to start with Python 2.6 before moving to Py3k was stimulated by two reasons:

1. Python 2.6 is still widely used so community can gain from the work performed for this version. Plus whatever is done for 2.6, can than be easily migrated to Py3k.
2. figleaf is currently stable for Python 2.6, so to start with the actual work instead of starting with porting figleaf to Py3k, it only makes sense to to use the current figleaf for Python 2.6 and use it for it's coverage analysis.

I haven't got much experience with Gcov, infact this is going to be my first time using it. So it is hard to estimate the time durations for the project milestones. But I hope once I get started with it, I'll be in a better position to judge the time constraints on the individual tasks.