When the default permissions line in /etc/profile is set to 077 instead of the default (022), the kernel sources (specifically gentoo-sources) are installed with permissions that do not allow kernel modules such as svgalib, kqemu, and ati-drivers to properly build their kernel modules. The error messages vary from module to module, but they all say "permission denied" about something. making a temporary copy of my linux source tree, then changing the permissions to 777 and building from that directory works just fine, at least for the packages mentioned above. I believe that this change is new to 2.6.16 series kernels, but It may have happened in 2.6.15 as well. If you need the exact output of any of the builds, I'll be happy to provide it.
When messing with default umask, you are on your own...
I had hoped that since the 077 was mentioned in a comment in /etc/profile as more secure, that I would receive a little more help with this. I know how to fix the problem for myself, and I'm fairly certain that most ebuilds specify the permissions for the files they install (although I have not been able to verify this as it is exams week). Wouldn't it be better to ensure that the kernel sources are installed with permissions that allow these modules to be built?
