The /etc/conf.d/dnsmasq config file variable $dnsmasq_opts should be $DNSMASQ_OPTS as this is what the initscript expects.
No idea where it's misspelled, it looks perfectly fine. http://sources.gentoo.org/viewcvs.py/gentoo-x86/net-dns/dnsmasq/files/dnsmasq.confd?rev=1.4&view=markup
It's spelled fine in CVS.