Well I ran into the same issue you are posting about tongiht, and I have a answer for you...
if you set you KERNEL_PATH=/usr/src/linux-2.6.5-1.358 that is what causes the issue, do this:
KERNEL_PATH=/usr/src/linux
to
KERNEL_PATH=/lib/modules/2.6.5-1.358/build/
and it will make and make install perfectly
Do feel bad though, it took me 30 hours also...