Changing the 'w' (write) in this line:
output = csv.DictWriter(open('file3.csv','w'), delimiter=',', fieldnames=headers)
To 'wb' (write binary) fixed this problem for me:
output = csv.DictWriter(open('file3.csv','wb'), delimiter=',', fieldnames=headers)
Python v2.75: Open()
Credit to @dandrejvv for the solution in the comment on the original post above.