Funny I did a similar thing recently, specifically for domain names. The code to train a Markov chain (without using any libraries outside standard Python) is this:

  import re, collections
  from itertools import *
  
  def words(text):
      return (w.group() for w in re.finditer(r"\w+", text.lower()) if w.group().isalpha())
  
  F=collections.defaultdict(lambda:collections.defaultdict(lambda:1))
  
  M = 5
  
  def add_spaces(word):
      return ' ' * M  + word.strip() + ' ' * M
  
  N = 0
  
  from operator import add
  def train(words):
      for word in words:
          w = add_spaces(word)
          for i in range(len(w)-M):
              F[w[i:i+M]][w[i+M]] += 1
      global N
      N = reduce(add,(n for d in F.itervalues() for n in d.itervalues()))
  
  train(words(file('big.txt').read()))

Then, I tried to measure how "good" a particular word is (experimenting with different measures):

  from math import log
  def goodness(word):
      w = add_spaces(word)
      res = 0
      for i in range(len(w)-M):
          res += F[w[i:i+M]][w[i+M]]
  #        res += log(F[w[i:i+M]][w[i+M]])
      global N
      return float(res) / ((len(w)-M)*N)
  
  print 'test score:', reduce(add, (goodness(w) for w in words(file('test.txt').read())))

Then, tried to find the top N words at less than 2 edits distance:

  alphabet = 'abcdefghijklmnopqrstuvwxyz'
  
  import types
  def edits1(word):
      if type(word)==types.StringType:
          n = len(word)
          return set(chain((word[0:i]+word[i+1:] for i in range(n)),                     # deletion
                     (word[0:i]+word[i+1]+word[i]+word[i+2:] for i in range(n-1)), # transposition
                     (word[0:i]+c+word[i+1:] for i in range(n) for c in alphabet), # alteration
                     (word[0:i]+c+word[i:] for i in range(n+1) for c in alphabet)))  # insertion
      else: #Assume word is actualy an iterable of words
          return set(reduce(chain,(edits1(e) for e in word)))
  
  def edits2(word):
      return edits1(edits1(word))

  def topn(n, word):
      words = [(x, goodness(x)) for x in edits2(word)]
      words.sort(cmp = lambda x,y: -cmp(x[1],y[1]))
      return words[:n]

I have borrowed some code from Peter Norvig's spelling checker, and the style is very much influenced by it.