Hi I'm getting exactly the same error using make-kpkg having used the badmem patch (http://prdownloads.sourceforge.net/badmem/badmem-5.0ns-kernel-2.6.4.diff?download). The first three points you make also apply to me as well.
-- System Information: Debian Release: testing/unstable kernel: Linux meep 2.6.3test1 #2 Tue Apr 6 01:49:22 CEST 2004 i686 GNU/Linux locale: LANG=en_GB.UTF-8 LC_CTYPE="en_GB.UTF-8" I do not know if this really is a bug or just me being stupid