There is a tool called buildroot that builds a kernel and a root file system with uClibc and Busybox. The result size for x86_64 using default settings is a few megabytes. You can trim this down a lot by leaving out features. Using uClibc instead of glibc may affect using virtual machines (like JVM), tho.
Gentoo is still alive and kicking. It's not that difficult to use and the documentation might be the best docs I've seen in any distribution. It's also worth mentioning that with a modern CPU, the time it takes to build software is not that long.
In fact, installing a "medium sized" application (e.g. not libreoffice) is faster with Gentoo's emerge than installing a standard Windows app. It takes about as long to download the source, compile and install with automation it as it does to navigate a web browser to a software's home page, locate download link and click "Next ->" 15 times in the installer manually.