Ok, looks as though it's time for a manually-installed version of python to upgrade portage, then a portage-installed python:2.6 to bootstrap your way towards modernity.
This is all explained here: http://www.gentoo.org/proj/en/portage/doc/manually-fixing-portage.xml This may also help http://forums.gentoo.org/viewtopic-p-5578709.html
