This script is designed to return ALL nearby vertices inside the selection sphere, whereas you are only looking for whole objects. So you could short circuit this code to continue on to the next object once you have a single matching vertex. (Which should speed up your check by several times for mostly enclosed objects with a large number of verts.

findNearByPoints.py

# Origin http://forums.cgsociety.org/archive/index.php?t-904223.html

import maya.OpenMaya as api
import maya.cmds as cmds

def findNearby(point, tolerance):
	'''findNearby
		point - Either an MPoint, a tuple (x, y, z), or an object name (Uses that objects pivot)
		tolerance - The search radius for finding nearby selection
	'''
	mode = 'vertex'
	
	#convert an object to an API point (Get it's worldspace position)
	if isinstance(point, basestring):
		point = pointFromObject(point)
	point = Point(point)
	
	meshList = buildMeshList()
	selection  = api.MSelectionList()
	
	for mesh in meshList:
		matrix = api.MMatrix(mesh.inclusiveMatrix())
		
		meshObj = api.MFnMesh(mesh)
		meshBB = meshObj.boundingBox()
		meshBB.transformUsing(matrix)
		
		pointBB = api.MBoundingBox(
								Point(point.x-tolerance, point.y-tolerance, point.z-tolerance),
								Point(point.x+tolerance, point.y+tolerance, point.z+tolerance))
		
		#if the mesh is inside the bounding box for the point+tolerance
		if meshBB.contains(point) or meshBB.intersects(pointBB):
			if mode in ['vertex', 'cv', 'point']:
				iter = api.MItGeometry(mesh)
				while not iter.isDone():
					vert = iter.position(api.MSpace.kWorld)
					if pointBB.contains(vert):
						if (point-vert).length()<tolerance:
							selection.add(mesh, iter.currentItem())
					iter.next()
			else:
				pass
	matching = []
	selection.getSelectionStrings(matching)
	return matching
	
def buildMeshList():
	meshList = []
	
	iter = api.MItDag(api.MItDag.kDepthFirst, api.MFn.kMesh)
	while not iter.isDone():
		dagPath = api.MDagPath()
		iter.getPath(dagPath)
		dagPath.extendToShape()
		if not dagPath.fullPathName().endswith('Orig'):
			meshList.append(dagPath)
		iter.next()
	return meshList

#DEPS#
class Point(api.MPoint, object):
	'''Subclass of MPoint, use a nicer str() and repr()'''
	def __init__(self, x=0, y=0, z=0):
		#allow point to take a single tuple, or 3 floats, or wrap an existing MVector
		if isinstance(x, api.MPoint) or isinstance(x, api.MVector):
			super(Point, self).__init__(x)
			return
		
		if isinstance(x, tuple) or isinstance(x, list):
			super(Point, self).__init__(x[0], x[1], x[2])
		else:
			api.MPoint.__init__(self, x, y, z)
		
	def __str__(self):
		return '(%g, %g, %g)'%(self.x, self.y, self.z)
	def __repr__(self):
		return '<<MPoint (%g, %g, %g)>>'%(self.x, self.y, self.z)
	
	def asTuple(self):
		return (self.x, self.y, self.z)

def pointFromObject(object):
	'''Get an objects xform, return Point object'''
	pos = cmds.xform(object, q=True, ws=True, t=True)
	return Point(pos[0], pos[1], pos[2])


findNearby('pSphere1', 1)