Linux 3.5 renamed usbhid to hid-generic. If genkernel 3.4.38 builds a Linux 3.5 initramfs and hid-generic is a module, the debug shell will be broken. I have pushed a fix for this to the genkernel GIT, but we should tag a release before Linux 3.5 is tagged to avoid problems.
Related commit for reference: http://git.overlays.gentoo.org/gitweb/?p=proj/genkernel.git;a=commitdiff;h=d7cf3689bf336e7598db32df6e4cafcde45a9459
+*genkernel-3.4.39 (21 Jul 2012) + + 21 Jul 2012; Sebastian Pipping <sping@gentoo.org> +genkernel-3.4.39.ebuild: + Bump to 3.4.39 (bug #427270) +