Oh wow.
Thank you all folks.
And especially Diego.
Yes the mig thing was off somehow.
I followed your clean installation with your steps and managed not only to run the tests, but also to successfully boot with the freshly built gnumech kernel.
Thanks so much.
Expect some (trivial at first) patches from me soon :)
Btw I think compiling this as a script and placing it somewhere prominently where people would be able to find it easily would help new folks like me bootstrap their HURD for development. I am sure there are/will be others that face similar issues like me.
I could do this, if you guys just suggest where would be the right place.
Thanks everyone once more!
Milos