We've been doing a lot of this linux payload stuff lately. I assume you can recover from a bad image. If so, I'd recommend building a kernel with kerneltiny config

(or whatever it's called -- tinykernel?), add back in console support of your choice, set the command line in menuconfig for earlypintk=tty0 or ttyS0,keep and boot it and see how far it gets. the kerneltiny configf can get you to a 400K bzImage so it's worth the effort to start small and grow it up -- that's how we've done it in my project at Google (not a chromeos project, though I'll be talking about it this fall).

To give you an idea of just how far the tiny kernel stuff goes, it removes all tests for uid != 0 and also all options to set uid to !0. This makes sense in a firmware payload. There's a lot of space saving options in that config and that's how you get a tiny kernel.

Once you get past this point you can then look at what initramfs to add. Or maybe you are past that point, but let's talk. I've been doing this a lot for the past year and I have probably made lots of mistakes I can help you avoid ...

BTW, I'm looking for people to work with on a project embedding Linux and a Go userland in flash, so if anyone out there wants to get involved, please, we need your brains. see u-root.tk.