all you need is a C (or is it C++) compiler and the sources, but in my opinion the only Free C compiler is the one from the GNU project, so therefore the easiest way would be installing any Linux distribution, get all the sources from kernel.org and build your own distribution from there...
It isn't really like you would be basing your distribution on the Linux distribution you compiled it on... but you just need something to start with (a development environment).... if you have a Windows machine with a C compiler you would be able to build it also (although you would need a lot of knowledge of C to get everything compiled, don't think the handy "make" scripts would work there) the basic thing you are compiling the stuff to is you architecture, so if you compile on a SUN-SPARC for instance you would get a SUN-SPARC Linux distro... (compiling on Intel x86 would give you an Ix86 distro) or you would need a cross-platform compiler, although I only know of one for compiling HP PA-RISC sources on Intel machines
So the best advice I can give you is follow the instructions on the linuxfromscratch web site, good luck...