After a bit of sweat and on my second router <g> I've finally got something I can work with.
It's a minimal distribution (as small as I could get it.. not easy when there are 1MB binary kernel modules to deal with). Runs squashfs, busybox 1.0, ipkg and has a firstboot script to make working jffs2 partition a bit like openwrt.
It's nowhere near as polished as I'd like but the best I could come up with in 4 days... I'm running it now and it works fine for me.
It's downloadable from http://www.nodomain.org/dg
There's a toolchain there also so you can compile binaries for it.
(Note that this is for the GT not the G - they're different architectures. I don't know what would happen if you flashed the wrong one but I can guess it wouldn't be nice).