UPDATE: Narrowed down the problem. When a TKL patch contains acpid (specifically acpid_1.0.4--5ubuntu9.3_i386.deb), the build gives a long stream of errors like
Failed to read file turnkey-mediawiki-2009.10-2-hardy-x86.rootfs/proc/irq/9/smp_affinity, creating empty file
Failed to read file turnkey-mediawiki-2009.10-2-hardy-x86.rootfs/proc/kallsyms, creating empty file
The build ultimately fails with
Failed to read file turnkey-mediawiki-2009.10-2-hardy-x86.rootfs/proc/kcore, creating empty file
Failed to read file turnkey-mediawiki-2009.10-2-hardy-x86.rootfs/proc/key-users, creating empty file
It fails at 27% completion, with proc-chroot still mounted on /root/turnkey-mediawiki-2009.10-2-hardy-x86.rootfs/proc.
So something about the acpid package seems to be causing tklpatch to try to package up the contents of procfs, which of course is not going to work. I can work around this by installing acpid manually after installation, but I'd rather not. This seems like a bug in tklpatch, but maybe I'm doing something wrong.
UPDATE: I believe this is a bug in tklpatch. We successfully worked around it by creating a tklpatch that adds the acpid .deb and a script to live-installer.d using the overlay/ mechanism. The script invokes dpkg to install the .deb.