does this happen in combination with the python-updater?
if not, following lines could indicate the prob:

>  * Building of dev-python/setuptools-0.6.10 with CPython 3.1...
> python3.1 setup.py build -b build-3.1
did you already switch to 3.1 python slot as your "main" python version?
# eselect python list

As I remember, there's also an eselect news item that recommends not doing so 
(some packages are not yet ported/fully compatible)...

-- 
Cheers,
Manuel Klemenz

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