http://www.reddit.com/r/Python/comments/n3arf/python_quiz_of_the_week_1/

gistfile1.txt

from collections import Counter
from sys import argv

letters = Counter(argv[2:])
letter_count = len(argv) - 2
with file(argv[1]) as f: words = [word.strip() for word in f] # one word per line
longest = max(len(word) for word in words)

for i in reversed(xrange(min(longest, letter_count) + 1)):
	possible_words = [
		word
		for (histogram, word) in (
			(Counter(word), word) for word in words if len(word) == i
		)
		if all(histogram[letter] <= letters[letter] for letter in histogram)
	]
	if possible_words:
		print possible_words
		break
else:
	print "No words can be made with those letters."