nfs rootfs problem

I have a DM368 circuit board running 2.6.32.17kernel, it's debian armel rootfs is NFS share on my Ubuntu machine. It used to work fine until I last week updated my Ubuntu to 10.04 and reinstalled all the development tools. Now after the board starts, it complains:

INIT: version 2.88 booting
Using makefile-style concurrent boot in runlevel S.
mount: only root can do that (effective UID is 1000)
mkdir: cannot create directory `/lib/init/rw/sendsigs.omit.d/': File exists
mount: only root can do that (effective UID is 1000)
udev requires a mounted procfs, not started. ... failed!


It appears the problem happens when init running s01mountkernfs.sh:
        domount tmpfs "" /lib/init/rw tmpfs -omode=0755,nosuid
    touch /lib/init/rw/.ramfs

    # Make pidfile omit directory for sendsigs
    mkdir /lib/init/rw/sendsigs.omit.d/

    #
    # Mount proc filesystem on /proc
    #
    domount proc "" /proc proc -onodev,noexec,nosuid

Does init run as UID=1000? Why did it work before?