The squirrelmail ebuild does not hold the ${SQUIRRELMAILDIR}/config/config.php file sacred and as such overwrites it on an update. I'm not sure how to add config file protection for that file as it is not the entire dir that needs protecting. Just the file.
g2boojum: see if you can resolve this issue. If not, we can look at adding a capability to Portage to handle this problem (reassign back to me if this is the case)
Fixed. Portage was fine, it's just that some symlink weirdness caused config.php to be overwritten. Now well behaved.