I have used every Mandrake since 8.2 and I really recommend skipping right past 9.0 (my least favorite) and going right to 10.0. I would replace the 10.0 discs and try again. If you don't know where to get them, you can try:
ftp://iso.linuxquestions.org/version.php?version=3
or my site
ftp://gnuberrycomputers.net, or mandrakelinux.com. Typically, there will be 3 discs, not 4. I even have instructions and configuration scripts you can optionally use. If you don't have fast internet, you can get the discs by mail order cheap from many places, even me for free(Gnuberry Computers LLC, were just starting up).
It sounds like you copied the gendhdlist command into the directory with your RPMs (that's why the ./genhdlist ./ ???). If so, you don't need to do this (and it may not work properly). If you have old hdlist.cz files in the directory, you may need to delete them first. Also, this path: .//RedHat/base/hdlist looks wrong to me.
I tried genhdlist and it worked. I wonder if it is different on your RH 7.1. Here's what I did:
1. mkdir hdlist_testdir
2. copied test RPMs into hdlist_testdir
3. cd hdlist_testdir
4. genhdlist ./
done
I wasn't logged in as root, it works both ways. I don't know if it matters either way but root is of course more dangerous to mess around with. Of course yours steps will be a little different because you already have your directory with RPMs in it, just delete any non-RPM files, cd into the directory and run genhdlist ./
( not ./genhdlist ./ ). The command genhdlist should be in your path already.
I have installed Mandrake many times (probably around 250!!!) and there are often quirks on any given system. I didn't succeed installing 10.0 on my HP laptop until the 4th time, but now it works awesome. I imagine any distro has quirks this way. How far along does the install of 10.0 get?