Further testing confirmed it is not the temperature sensor that is breaking the connection to the Blynk server from the Raspberry Pi. It disconnects after maybe 30 seconds so in this time I can send pins high and low on the connected Arduino. After the initial 30 seconds it ALWAYS disconnects.
It is as if the connection was never really made but as the socket is open the python code can be sent from anywhere on the internet to control the Arduino via the Pi.
manusovich is also having problems with Python using iOS and a Pi as described in post 62 at Howto for Raspberry Pi