I had the same problem, and the following advice from Manuel Bouyer
appeared to fix it

 > try a 'make cleandir' in /usr/src/distrib before running 'make in
 > /usr/src/distrib/i386/floppies'.

ref: http://mail-index.netbsd.org/tech-install/1999/09/17/0001.html


Allen Briggs writes:
 > When trying to do a 'make snapshot' for NetBSD/i386 on the netbsd-1-4
 > branch, I'm getting stuck with building src/distrib/i386/floppies/bootfloppy.
 > The gzipped kernel is too large to fit on the floppy image.  I can
 > get it to fit by removing mt, slattach, tip, and restore, but I
 > don't think this is the long-term solution.  I also can't believe
 > that I'm the only one to run into this problem.
 > 
 > So, has anyone else run into this?  What's the solution?
 > 
 > Actually, in my case, I'm building a CD to install from since an
 > old motherboard that I'm getting ready to install on apparently
 > has a busted floppy controller.  I expect that there's a better
 > way to install this that doesn't require a full boot floppy image
 > (I'm working off the information from Andreas Gustafsson in the
 >  port-i386 archives:
 >  http://mail-index.netbsd.org/port-i386/1998/11/12/0003.html)
 > 
 > -allen

-- 
Rex McMaster                       rex@mcmaster.wattle.id.au
                     http://www.compsoft.com.au/~rmcm/pgp-pk