Hello,
what you've described are the classic symptoms of
building a cross-compiler without having the necessary
tools installed.
You need to build and install binutils with the same
target and prefix you're building gcc with.
(--prefix=/opt/gcc-3.2.3 --target=i586-pc-linux-gnu).
You should probable add $PREFIX to $PATH too (so gcc
can find said binutils).
Once you do that though, you'll need i586 headers and
libraries to be available. See
<http://bytesex.org/cross-compiler.html> for instance.
Also note that you'll need to pass the
--with-headers=/path/to/i586/include/directory and
--with-libs=/path/to/i586/libs flags when building
(<http://gcc.gnu.org/install/configure.html> under the
section about cross-compilers, ignore the stuff about
sysroot, it's only for newer compilers).
For distcc, you can probably cheat (not use libraries,
headers). To do that, instead of doing make for gcc,
do make -k and make -k install. It'll break building
the libraries, but distcc doesn't actually need them.
You need binutils in any case.
That said, I can't imagine why you'd use an iBook on a
distcc farm. My poor tiBook takes many hours just to
compile gcc, and that's enough for me :-)
Cheers,
Dara