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The hardware: raspberry pi + PiTFT 2.8" capacitive touchscreen.
Test case:
import sys, pygame, os

os.putenv('SDL_MOUSEDEV', '/dev/input/touchscreen')
os.environ["SDL_FBDEV"] = "/dev/fb1"
os.putenv('SDL_VIDEODRIVER', 'fbcon')
os.putenv('SDL_MOUSEDRV', 'TSLIB')
pygame.init()

size = width, height = 240, 320

screen = pygame.display.set_mode(size)

while 1:
    for event in pygame.event.get():
        if event.type == pygame.QUIT: sys.exit()
    pygame.display.flip()

I can provide a video, but essentially cursor jumps around instead of following the finger. It used to work somewhere around version 1.2.15 (to be confirmed). Much more info here:

https://forums.adafruit.com/viewtopic.php?f=47&t=76169&p=439894#p435225