Well, the time I can dedicate to this is severly limited , but at the moment I have removed a whole bunch of stuff from a standard PR1.3 install and copied the whole rootfs to a folder under /home (which I partitioned to be 8GB).

Now I'm working on making a version of KP50 with many modules built-in so that it can boot via U-boot without needing an initrd or anything from the NAND chip.

That'll take some time though..