OK, a workaround for snapshot 2004/10/30-05:00:
1. oemake opie-image # exits with an error
2. oebuild $PKGDIR/sqlite/sqlite_2.8.15.oe # version present in the original 3.5.1 release
3. oemake sqlite
4. oemake opie-image
Not really sure if step 2 is necessary but it's what I did and it worked.