Line 74 of /etc/init.d/fixinittab looks like this echo "c${x}:12345:respawn:/sbin/mingetty --noclear --autologin root 38400 tty${x} linux" >> /etc/inittab this is not sane: 38400 would be valid for agetty, but not for mingetty. Environments that are treated by this part of the script end up with mingetty [<pid>]: 38400: No such file or directory leaving the system without a usable tty.
yes i am seeing this as well booting from loopback with grub2.
This is fixed on latest 11.1 beta found on freenode at #gentoo-ten.
Closing per Fernando's last comment.