I understand there are ways to roll a distro based off current repos. I'm in a strict security environment running servers that are not connected to outside networks.

The system updates we recieve are incremental. In the event of a hard disk failure, we have to install the base system and individually apply 20+ patches.

I'm wondering if there is a way to roll the current system into a set of install CDs (or DVDs) to install on incoming systems and refreshing the current systems.

Again, I don't have access to outside repositories. I can however bring in a CD with utilities (Such as Revisor) into the server room.

From what I understand of Revisor, you're actually building the system from mounted ISOs and not the current install. Please correct me if I'm wrong.

There is Fedora LiveCD for building CD/DVD's from kickstart files. I have not researched regular use of kickstart files.

My solution was to create mirrors of the internet repositories in question with mrepo, and then I copied rpm's and repository packages to a USB HDD, so I change/swap repository files so system in question looks for repository on UDB HDD, and just run "yum update" (I use CentOS).

So one of the options could be to set your own local repository that would be manually populated (DVD with mirrors from internet) and set repository config files to look to your local repository for updates. That way you could avoid manualy applying updates and instead use regular "online" update proces.