Ah, false alarm. I had forgotton to gzip the new filing system image.
Once I did that, it all worked perfectly!

I used only my upc utility and upgclient with filesystem images I built myself---I needed
nothing from empeg's upgrade.

I created a mini-debian installation by picking apart the packages from
http://www.uk.debian.org/debian/dists/potato/main/binary-arm/
but it's really hard to get a useful subset in 16Mb. Even 32Mb isn't
enough for the basic C development tools. So I ended up using both hda5
for / and hda2 for /usr.

I can do hda5 and hda2 together or separately. You don't need to do a
separate CHUNK_PUMPHDA for each partition---indeed, you don't seem to
need this at all.