As soon as your / or /boot device is a devicemapper disc (/dev/mapper/$name) grub-mkconfig fails with the following error:
/sbin/grub-probe: error: cannot find a device for / (is /dev mounted?).
According to an arch linux bugreport  this error occurs because /dev/mapper/$name is a symbolic link to ../dm-$id. I tried the patch  from that bugreport and it works for me. Maybe we should add it to the grub-1.98 ebuild because devicemapper is requied when using lvm or cryptsetup and this is a quite common configuration. Thanks.
grub2 issues go upstream
I fixed this upstream a while back. If Gentoo is distributing a set of udev rules that create symlinks under /dev/mapper, then as a matter of good distribution integration work it would be nice if you backported the patch to support this to your current stable ebuild of grub2, so that everything works together and we don't get complaints from Gentoo users directed to us upstream until such time as we release 1.99.
The patch is at http://bazaar.launchpad.net/~vcs-imports/grub/grub2-bzr/revision/2403; as you can see it's quite small. It should backport straightforwardly to 1.98, with the exception that you need to remember to apply the patch to util/getroot.c rather than to kern/emu/getroot.c.
better yet, put out a new release already. we havent started supporting grub2 yet in Gentoo.