Not exactly a distribution, but you can simply use the optware/cs08q1armel feed on various rootfs's. I've tested that the feed works fine on DevKit rootfs1.0, and ubuntu.
The setup instruction is at http://www.nslu2-linux.org/wiki/Optware/HomePage
For web server, subversion, git server and all sorts of headless applications, you don't need a full distribution. There's also native toolchain in the feed. There's a squeezecenter package, however it needs some more testing (squeezecenter on other feeds are known to work).
We plan to have a kernel-image/kernel-modules feed open soon.
bzhou at nslu2 dash linux dot org