From: Hisashi T Fujinaka <htodd@twofifty.com>
Date: Sun, 11 Mar 2001 15:52:26 -0800 (PST)

> allison:/usr/src # make build
> Build started at: Sun Mar 11 15:51:12 PST 2001
> (cd /usr/src/etc && make -m /usr/src/share/mk DESTDIR=/ distrib-dirs)
> install  -d -o root -g wheel -m 755 /
> mtree -def mtree/NetBSD.dist -p // -u
> cd /; rm -f sys; ln -s usr/src/sys sys
> (cd /usr/src/share/mk && make install)
> install -r  -c   -o   -g   -m   bsd.README bsd.doc.mk bsd.dep.mk bsd.depall.mk bsd.files.mk bsd.hostprog.mk bsd.inc.mk bsd.info.mk bsd.kernobj.mk bsd.kinc.mk bsd.kmod.mk bsd.lib.mk bsd.links.mk bsd.man.mk bsd.nls.mk bsd.obj.mk bsd.own.mk bsd.prog.mk bsd.subdir.mk
> bsd.sys.mk sys.mk /
> install: bsd.README: invalid file mode

I thought that problem was fixed by usr.bin/make/var.c, revision 1.58. 
Try updating your source again.

---
Hiroki TANIKAWA
tanh@tk.airnet.ne.jp