So, another days work led to this: axdroid_20100626.zip. The keyguard is now disabled so won’t cause problems, the SD card is now accessible (eg. to the Music app) and I did a few things I think may have possibly sped it up slightly (including this being a user rather than eng build). I also reduced the size of the included swap file to 128MiB (from 256MiB). It will still take a fairly long time on the first boot whilst it creates the root filesystem image, so bear that in mind.
Also, for anyone interested, the source for the kernel is now at http://github.com/paulburton/axdroid_kernel.