import re
pattern = re.compile("hello", re.IGNORECASE)
pattern.sub("bye", "hello HeLLo HELLO")
# 'bye bye bye'

Expanding on Mark Byers' answer, Here's a solution which works for replacement text of any length.
The trick is to send a function to re.sub().

import re
def case_sensitive_replace(string, old, new):
    """ replace occurrences of old with new, within string
        replacements will match the case of the text it replaces
    """
    def repl(match):
        current = match.group()
        result = ''
        all_upper=True
        for i,c in enumerate(current):
            if i >= len(new):
                break
            if c.isupper():
                result += new[i].upper()
            else:
                result += new[i].lower()
                all_upper=False
        #append any remaining characters from new
        if all_upper:
            result += new[i+1:].upper()
        else:
            result += new[i+1:].lower()
        return result

    regex = re.compile(re.escape(old), re.I)
    return regex.sub(repl, string)

print case_sensitive_replace("abc Abc aBc abC ABC",'abc','de')
print case_sensitive_replace("abc Abc aBc abC ABC",'abc','def')
print case_sensitive_replace("abc Abc aBc abC ABC",'abc','defg')

Result:

de De dE de DE
def Def dEf deF DEF
defg Defg dEfg deFg DEFG