Basically, if you start from a blank slate, XCode 4.2 doesn't include GCC 4.2.x
This makes the build steps not work on Lion.

I fixed this by setting the following in the Xcode project Build Settings

1. Architectures to "Native Architecture of Build Machine"
2. Compiler for C/C++/Objective -C to "Default compiler (Apple LLVM compiler 3.0)"

Popped, back into terminal and ran release.sh. Worked like a charm!