I've been writing a telnet BBS in python since about 2003. It has many similarities in your MUD. Initially we had a hand-crafted simple socket telnet daemon, then later twisted, but when we decided to get rid of twisted for a pure-python solution, I discovered your miniboa source.
It has been modified quite a bit for more advanced telnet negotiations, I encourage you to take a look. You will find NAWS, TTYPE, and even NEW_ENVIRON negotiation. I plan to release x/84 to pypi within a day or so[.]
I really enjoy it when someone dusts off my brain-addled code and manages to hammer it into something useful. You can check out his project here;