First I connected the Z to a linux desktop and tarred up the whole /hdd3 over the USB link so I would have a backup. This procedure will wipe out everything in /hdd3.
After that just unmount /hdd1 /hdd2 and /hdd3
fdisk /dev/hdc
Don't delete partitions 1 or 2! I think they hold the data for a full reset. Again, I'm a zaurus newb and have lots to learn. In any case they are small and I wanted to retain as much original function as possible.
delete partition 3
new partition, primary, 3
make the size anything you like as long as you leave enough for the linux part.
type fat32
new partition, primary, 4
For gentoo this has to be >1G I went with 2G.
type linux
write, quit
mkdosfs -F 32 /dev/hdc3
mkfs.ext2 -j /dev/hdc4
either remount /hdd1 /hdd2 and /hdd3 or reboot.
mkdir /home/gentoo (or whatever)
mount -t ext3 /dev/hdc4 /home/gentoo
--Chris