Double-decoding unicode in python

Question

I am working against an application that seems keen on returning, what I believe to be, double UTF-8 encoded strings.

I send the string u'XüYß' encoded using UTF-8, thus becoming X\u00fcY\u00df (equal to X\xc3\xbcY\xc3\x9f).

The server should simply echo what I sent it, yet returns the following: X\xc3\x83\xc2\xbcY\xc3\x83\xc2\x9f (should be X\xc3\xbcY\xc3\x9f). If I decode it using str.decode('utf-8') becomes u'X\xc3\xbcY\xc3\x9f', which looks like a ... unicode-string, containing the original string encoded using UTF-8.

But Python won't let me decode a unicode string without re-encoding it first - which fails for some reason, that escapes me:

>>> ret = 'X\xc3\x83\xc2\xbcY\xc3\x83\xc2\x9f'.decode('utf-8')
>>> ret
u'X\xc3\xbcY\xc3\x9f'
>>> ret.decode('utf-8')
# Throws UnicodeEncodeError: 'ascii' codec can't encode ...

How do I persuade Python to re-decode the string? - and/or is there any (practical) way of debugging what's actually in the strings, without passing it though all the implicit conversion print uses?

(And yes, I have reported this behaviour with the developers of the server-side.)