I resolved this by building mksquashfs from the version 3.4 source (obviously Ubuntu Zesty omits to package version 3 and 4 together).
utelnetd remains to be an issue. Any hints there ?
Can confirm that the mod-kit also works for customizing VTOXXX SIP firmware - thanks for all the effort and explanations to make it available.
I have a question though regarding squashfs part of the build.py - it fails at building user-x.cramfs.img complaining mksquashfs3 does not exist. The...