Solved! Go to Solution.
Try the tip here, apparently a 'reload' is necessary? See the webhelp:
http://resources.arcgis.com/en/help/main/10.1/index.html#//001500000038000000
That is, the reload function may be necessary if importing any other modules/scripts into from your pyt code. Otherwise, your editor may be still open...it refreshes the pyt within ArcGIS when you close it, according to the doc. Supposedly, you can manually refresh it as well from Catalog as well.