wrk-station1 ~ # cat <<END > /paludis/etc/paludis/repositories/paludis-overlay.conf
> location = \${ROOT}/var/paludis/repositories/paludis-overlay/
> sync = svn://svn.pioto.org/paludis/overlay
> profile = \${ROOT}/var/paludis/repositories/gentoo/profiles/default-linux/x86/2007.0
> eclassdir = \${ROOT}/var/paludis/repositories/gentoo/eclass
> distdir = \${ROOT}/var/paludis/repositories/gentoo/distfiles
> cache = /var/empty
> format = ebuild 
> importance = 10

wrk-station1 ~ # cat <<END > /paludis/etc/paludis/repositories/installed.conf
> location = \${ROOT}/var/db/pkg/
> format = vdb

wrk-station1 ~ # cat <<END > /paludis/etc/paludis/repositories/gentoo.conf
> location = \${ROOT}/var/paludis/repositories/gentoo/
> sync = rsync://the-server.so-centrlwebhosting.homelinux.org/gentoo-portage/
> profile = \${ROOT}/var/paludis/repositories/gentoo/profiles/default-linux/x86/2007.0
> format = ebuild

wrk-station1 ~ # cat <<END > /paludis/etc/paludis/bashrc
> export CFLAGS="-O2 -march=pentium4 -pipe -fomit-frame-pointer -fweb -frename-registers -fgcse-after-reload"
> export CXXFLAGS="\${CFLAGS}"
> export CHOST="i686-pc-linux-gnu"
> export LDFLAGS="-Wl,-O1 -Wl,--as-needed -Wl,--hash-style=both -Wl,-znow"
> export MAKEOPTS="-j3"


This is what I have:

# Gentoo repository configuration file

location = /var/paludis/repositories/gentoo/
sync = rsync://rsync.europe.gentoo.org/gentoo-portage/
profiles = /var/paludis/repositories/gentoo/profiles/default-linux/x86/2007.0/desktop/
format = ebuild
distdir = /var/paludis/distfiles
cache = ${location}/metadata/cache
write_cache = /var/empty

# Paludis installed files repository configuration file

location = /var/db/pkg/
format = vdb

# Paludis paludis-overlay repository configuration file

location = /var/paludis/repositories/paludis-overlay/
sync = svn://svn.pioto.org/paludis/overlay
format = ebuild
master_repository = gentoo
cache = /var/empty

......

Oh and take -znow out of your LDFLAGS