Line 709 from <genkernel>/gen_initramfs.sh reads: case ${COMPRESS_INITRD_TYPE} in xz|lzma|bzip2|gzip2|lzo) compression=${COMPRESS_INITRD_TYPE} ;; look here ------------^ While the comment from /etc/genkernel.conf reads: # Types of compression: best, xz, lzma, bzip2, gzip, lzop # "best" selects the best available compression method #COMPRESS_INITRD_TYPE="best" "gzip2" is likely a typo (should be gzip). This has the effect of genkernel NOT compressing the initrd at all when told so through the config file. Does not fail in any meaningful way though. As a workaround, COMPRESS_INITRD_TYPE="gzip2" can be used in the config file.
disregard that last line about a workaround, using "gzip2" as a config value causes the script to fail a few lines later.
Thanks for reporting, fixed in Git. http://git.overlays.gentoo.org/gitweb/?p=proj/genkernel.git;a=commitdiff;h=c0ed5530a5f904ab63ccffa2ce3ec43f4720be49
+*genkernel-3.4.29 (08 Apr 2012) + + 08 Apr 2012; Sebastian Pipping <sping@gentoo.org> +genkernel-3.4.29.ebuild: + Bump to 3.4.29 +