The newest version of squashfs-tools cannot build a proper squashfs 1.3 filesystem. It is also necessary for the version of squashfs-tools to match the version of squashfs available in the kernel. The squashfs-tools-2.0_alpha is *not* backwards compatable to 1.3 and therefore causes the inability to boot to any kernel with 1.3 patched in when the image is built with squashfs-tools 2.0_alpha.
what do you want to do about squashfs? maybe mask it in livecd profiles?
The livecd profiles are the same as the "regular" profiles. What needs to be done is there needs to be coordination with the versions in the kernels and the versions in portage, otherwise both are useless. This also applies to stabilizing each. For now, I have package.masked the newer version of squashfs-tools locally to solve the problem, but I can see this becoming an issue in the future, especially as we (livecd) are looking to move to squashfs as our default for livecd builds.
Well, we can't make them compatable... but I have added squashfs-tools 2.0 into portage and marked stable. It is also the version used in the current stable kernels which support it.
