Thanks everyone for your help- and especially Micko. I followed your aufs kernel config to the tee and also recompiled aufs-util and it worked. I am posting this from my homemade slackware live usb key. Check out the mount and kernel version!
It took a lot of work to get to this point, so I'm pretty excited.
I'm willing to share if anyone knows where I can upload a 2.7G .iso file to be hosted.
I specifically removed libflashplayer.so and java sdk (needed to compile xbmc) before making the live distro because of licensing. Everything else should have readily available source (and actually I saved my source as well).