Bitbake Doesn't Like Distro In Local.conf?, Never mind... Options

[KerwoodDerby]

[My subsequent edit: I installed the Psyco compiler in the python/site-packages directory and now I'm off and running. Whatever. At any rate, please ignore the following. -- KD]

I followed the Getting Started instructions of the OE website and carefully edited my local.conf file to have the following settings:

CODE

DL_DIR = "/home/mjj/zaurus/dev/sources"
BBFILES := "/home/mjj/zaurus/dev/org.openembedded.dev/packages/*/*.bb"
BBMASK = ""
# ASSUME_PROVIDED += "virtual/${TARGET_PREFIX}gcc virtual/libc"
PREFERRED_PROVIDERS = "virtual/qte:qte virtual/libqpe:libqpe-opie"
PREFERRED_PROVIDERS += " virtual/libsdl:libsdl-qpe"
PREFERRED_PROVIDERS += " virtual/${TARGET_PREFIX}gcc-initial:gcc-cross-initial"
PREFERRED_PROVIDERS += " virtual/${TARGET_PREFIX}gcc:gcc-cross"
PREFERRED_PROVIDERS += " virtual/${TARGET_PREFIX}g++:gcc-cross"
TMPDIR = /home/mjj/zaurus/dev/tmp
MACHINE = "spitz"
TARGET_ARCH = "arm"
TARGET_OS = "linux"
DISTRO = "openzaurus-3.5.4.1"
# ENABLE_BINARY_LOCALE_GENERATION = "0"
# ASSUME_PROVIDED += "qemu-native"
MACHINE_KERNEL_VERSION = "2.6"
# INHERIT = "package_ipk"
# INHERIT = "package_tar"
IMAGE_FSTYPES = "jffs2 tar"
# CACHE = ""
BBDEBUG = "yes"
# DEBUG_BUILD = "1"
# INHIBIT_PACKAGE_STRIP = "1"
# PROFILE_OPTIMIZATION = "-pg"
# SELECTED_OPTIMIZATION = "${PROFILE_OPTIMIZATION}"
# LDFLAGS =+ "-pg"
# PARALLEL_MAKE = "-j 4"
BBINCLUDELOGS = "yes"
CVS_TARBALL_STASH = "http://www.oesources.org/source/current/"

But I get this when I try to make nano:

CODE

~/zaurus/dev> bitbake nano
NOTE: Psyco JIT Compiler (http://psyco.sf.net) not available. Install it to increase performance.
NOTE: Using cache in '/home/mjj/zaurus/dev/tmp/cache'
NOTE: Parsing finished. 3422 cached, 0 parsed, 89 skipped, 0 masked.
WARNING: sanity.bbclass can't compare versions without python-distutils
WARNING: sanity.bbclass can't compare versions without python-distutils
ERROR:  Openembedded's config sanity checker detected a potential misconfiguration.
       Either fix the cause of this error or at your own risk disable the checker (see sanity.conf).
       Following is the list of potential problems / advisories:

       Please set a valid DISTRO in your local.conf
~/zaurus/dev>

It's definitely reading the local.conf file because it responds to my changes to the DISTRO variable to something absurd. The BBPATH variable appears to be properly set.

Where's my screw-up? TIA