Added after export DEBLET_RUN_FROM_LINUXRC="1" and before the pivot, but it doesn't seem to do anything at all. Also tried with /sbin/chroot, still a no-go.
Tried adding mount > /mnt/new_root/mountpoints to see what filesystems were mounted where, but no files are created. (I'd redirect it to a specific filesystem, but I don't yet know what filesystems are mounted- I'm assuming /mnt/new_root should be the mmc card).

Does ext2 not work, or are you just concerned about the integrity of my filesystem after all this rebooting? I'm running ext2, but the .item seems to be properly set up for it. Is ext3 a requirement at this point?

Update: Tried adding 'touch $ROOT_PLACE/test' before cd $ROOT_PLACE to figure out where $ROOT_PLACE actually was, and it doesn't seem to have created a file anywhere.
Also added text2screen -s 2 -H center -y 100 -T 0 -t `mount | grep new_root`, which displays the line '/dev/mmcblk0p1' (and nothing else; not like /dev/mmcblk0p1 on /mnt/new_root type ext2 or anything)... and then promptly reboots.

Update again:
Meh. Just ran through another complete install on ext3 to make sure that ext2 wasn't the issue, but I'm running into the same problems.