> gpg --homedir /mnt/flash/root/.gnupg/ --gen-key
> gpg: cannot open `/dev/tty': No such device or address

Most likely you did this on the console. Try to do that in a
telnet session. gpg needs /dev/tty in order to ask for a passphrase
in a secure way. 

/dev/tty is the controlling tty of the process opening it, and according
to the invoking context, you may have a controlling tty or not.

This is not specific of the fox, it's generic Unix behaviour:

   morgana% uname -m
   i686
   morgana% sleep 1 < /dev/tty
   morgana% ssh localhost "sleep 1 < /dev/tty"
   /dev/tty: No such device or address.

Try "man 4 tty" for an introduction.

Hope this helps
/alessandro

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