Apparently, we have to have a rootfs big enough to hold all dev and test tools too.

src/scripts/build_image

 #!/bin/bash
 
 # Copyright (c) 2009 The Chromium OS Authors. All rights reserved.
 # Use of this source code is governed by a BSD-style license that can be
 # found in the LICENSE file.
 
 # Script to build a bootable keyfob-based chromeos system image from within
 # a chromiumos setup. This assumes that all needed packages have been built into
 # the given target's root with binary packages turned on. This script will
 # build the Chrome OS image using only pre-built binary packages.
@@ skipping 147 matching lines @@
 
 # Check for loop device before creating image.
 LOOP_DEV=$(sudo losetup -f)
 if [ -z "$LOOP_DEV" ] ; then
   echo "No free loop device.  Free up a loop device or reboot.  exiting. "
   exit 1
 fi
 
 # Create root file system disk image to fit on a 1GB memory stick.
 # 1 GB in hard-drive-manufacturer-speak is 10^9, not 2^30.  950MB < 10^9 bytes.
-ROOT_SIZE_BYTES=$((1024 * 1024 * 640))
+ROOT_SIZE_BYTES=$((1024 * 1024 * 720))
 dd if=/dev/zero of="$ROOT_FS_IMG" bs=1 count=1 seek=$((ROOT_SIZE_BYTES - 1))
 sudo losetup "$LOOP_DEV" "$ROOT_FS_IMG"
 sudo mkfs.ext3 "$LOOP_DEV"
 
 # Tune and mount rootfs.
 UUID=$(uuidgen)
 DISK_LABEL="C-KEYFOB"
 sudo tune2fs -L "$DISK_LABEL" -U "$UUID" -c 0 -i 0 "$LOOP_DEV"
 sudo mount "$LOOP_DEV" "$ROOT_FS_DIR"
 
@@ skipping 185 matching lines @@
 
 OUTSIDE_OUTPUT_DIR="../build/images/${FLAGS_board}/${IMAGE_SUBDIR}"
 echo "Done.  Image created in ${OUTPUT_DIR}"
 echo "To copy to USB keyfob, OUTSIDE the chroot, do something like:"
 echo "  ./image_to_usb.sh --from=${OUTSIDE_OUTPUT_DIR} --to=/dev/sdb"
 echo "To convert to VMWare image, OUTSIDE the chroot, do something like:"
 echo "  ./image_to_vmware.sh --from=${OUTSIDE_OUTPUT_DIR}"
 echo "from the scripts directory where you entered the chroot."
 
 trap - EXIT