Thanks for your reply

I am actually using the KNOPPIX CD to start of from not my existing live CD.

Yes the drive is totally empty.

In the meantime I was able to loop mount the KNOPPIX compressed file system on my gentoo machine and was able to extract the files.

So, I guess I solved it in a way but still did not manage to successfully follow the process using the wiki.

I keep at it and post updates here

Thanks

AR