well i really dont know whats wrong, but there is a way around it!
if you have an existing installation of linux you can chroot in and do effectively the same thing the live cd would do for you AND youll still have full functionality for your box while you compile your uber-optimized system for a week (well a day or two) or if you dont have an existing installation try damn small linux or knoppix and you can do the same from there, all that the gentoo livecd is is a bootable cd capable of chrooting...thats all for instructions on this alternate installation go here
http://www.gentoo.org/doc/en/altinstall.xml
