It seems that XFree 4.2.0(-r5) is not cooperating with the kernel modules coming with linux-sources-2.4.17-r2. If the modules in the first tar packages are compiled and installed instead DRI seems to work OK...
Can you please elaborate on the problem? I have gotten DRI and linux-sources-2.4.17-r2 working together just fine.
Marking this as "WORKSFORME"