The symptoms are similar to those described in http://lists.boost.org/boost-testing/2007/02/3998.php (bjam cannot be found and then if bjam.exe is provided, you get the trace ending with the text below).  The cited thread provides a patch for problem in the earlier build.

# Searching for "process_jam_log" in "/cygdrive/c/temp/regression/tools_regressi

on/build"...

Traceback (most recent call last):

  File "run.py", line 51, in <module>

    runner(root)

  File "/cygdrive/c/temp/regression/tools_regression_src/regression.py", line 18

1, in __init__

    self.main()

  File "/cygdrive/c/temp/regression/tools_regression_src/regression.py", line 46

7, in main

    getattr(self,action_m)()

  File "/cygdrive/c/temp/regression/tools_regression_src/regression.py", line 42

4, in command_regression

    self.command_setup()

  File "/cygdrive/c/temp/regression/tools_regression_src/regression.py", line 28

0, in command_setup

    self.build_if_needed(self.process_jam_log,self.pjl_toolset)

  File "/cygdrive/c/temp/regression/tools_regression_src/regression.py", line 56

6, in build_if_needed

    tool[ 'build_path' ] = self.tool_path( tool )

  File "/cygdrive/c/temp/regression/tools_regression_src/regression.py", line 59

1, in tool_path

    , '\n'.join( [ name_or_spec[ 'path' ], build_dir ] )

Exception: Cannot find "process_jam_log" in any of the following locations:

/cygdrive/c/temp/regression/process_jam_log

/cygdrive/c/temp/regression/tools_regression/build