cfg-updates attempt to hook into the ebuild process is via jamming some inline code into /etc/portage/bashrc; this hasn't been the correct way to do it in a long while. It should be appending the following command instead- pre_pkg_setup() { [ "$ROOT" == / ] && [ -e "/usr/bin/cfg-update" ] && cfg-update --index } Specifically, it needs to use the defined hooks, and it should not run when the target isn't the local ROOT (the code isn't ROOT aware at all). Not to be a complete ass about this, but you've got about 2 weeks before I revbump it w/ a patch adding this- the current inline crap flat out breaks pkgcore env sourcing (pkgcore is strict about ensuring nothing randomly spews crap during sourcing).
Fixed, but without a revbump, because anyone who already has cfg-update installed won't get his/her bashrc rewritten. If you prefer, feel free to revbump with a version that does do this. Thanks for the report.
a grep'ing of /etc/portage/bashrc from w/in pkg_preinst looking for the old form comes to mind...