reading from sys.stdin without newline or EOF

Simple:

data=sys.stdin.read().splitlines()

for i in data:
        print i

No newlines

sys.stdin.readline() waits forever until it receives a newline. Then it considers the current line to be complete and returns it in full. If you want to read data that doesn't contain newlines or you don't want to wait until a newline is received before you process (some of) the data, then you're going to have to use something other than readline. Most likely you should call read, which reads arbitrary data up to a given size.

However, your GPS appears to be sending data in the well-known NEMA format, and that format certainly terminates each line with a newline. Actually, it probably terminates each line with CRLF (\r\n) but it is possible that the \r could be getting munged somewhere before it gets to your TCP socket. Either way there's a \n at the very end of each line.

If your readline call is hanging without returning any lines, most likely it's because the sender is buffering lines until it has a full buffer. If you waited long enough for the sender's buffer to fill up, you'd get a whole bunch of lines at once. If that's what's happening, you'll have to change the sender to that it flushes its send buffer after each NEMA sentence.

It seems you are receiving # instead of <CR><LF>, just read until the # sign.

data = ""
while len(data) == 0 or data[-1] <> '#':
    data += sys.stdin.read(1)

#do something with data
print 'ok'