editliveos.py is designed to work with LiveOS structured images (see
https://fedoraproject.org/wiki/LiveOS_image) in a Live CD .iso file, mounted Live CD or Live USB/SD, or a directory containing the LiveOS components. One option is an uncompressed 'ext3fs.img' (as might exist when the disk was loaded with the --skipcompress option).
So if your customized image were copied into an uncompressed ext3fs.img file, and placed in a /LiveOS folder under a directory (along with the necessary SYSLINUX boot components), such as,
/directory
/LiveOS
|- ext3fs.img
/syslinux (or isolinux folder with boot files, initrd0, vmlinuz, etc.)
You could call editliveos.py with /directory as the LiveOS_source argument, such as,
./editliveos.py [other options] /directory