basics of python encryption w/ hashlib sha1

What you want is an encryption library not one that just provides hash algorithms. With python's hashlib library:

import hashlib
m = hashlib.sha1()
m.update("The quick brown fox jumps over the lazy dog")
print(m.hexdigest())

Returns: 2fd4e1c67a2d28fced849ee1bb76e7391b93eb12

Given this hash, it is extremely difficult impossible(in general) to recover the original message. What you want is a encryption library, which the Python standard library doesn't have. There are plenty of questions related to python cryptography libraries on SO that might be helpful.

The hashlib module provides hashing functions. While there is some relation to encryption, once you hash some data you can not go back to get the original data from the hash result.

Instead of encripting the data you can take a different approach: creating a unique signature using a hash of the data and some secret.

shared_private_key = "ABCDEF"

def create_signature(data):
    return hashlib.sha1(repr(data) + "," + shared_private_key).hexdigest()

def verify_signature(data, signature):
    return signature == create_signature(data)

Finally, you send to the Website 2 the data plus the signature. That way you can be (mostly) sure that no unauthorized person tampered the data.

Python standard library doesn't have encryption algorithms. Try pycrypto, it has some examples here.