I believe that I'm also running into this bug except in my case mksquashfs (from squashfs-tools 1:4.0-8) is being invoked by live-helper (now known as live-build). Occasionally, mksquashfs will hang at seemingly 100%. I've captured the following debug information:

  `-lh_build,16803 /usr/bin/lh_build
      `-lh_binary,7979 /usr/bin/lh_binary
          `-lh_binary_rootf,9495 /usr/bin/lh_binary_rootfs
              `-mksquashfs,9596 chroot filesystem.squashfs
                  |-{mksquashfs},9598
                  |-{mksquashfs},9599
                  |-{mksquashfs},9600
                  |-{mksquashfs},9601
                  |-{mksquashfs},9602
                  |-{mksquashfs},9603
                  |-{mksquashfs},9604
                  |-{mksquashfs},9605
                  |-{mksquashfs},9606
                  `-{mksquashfs},9607

strace of mksquashfs,9596:
sched_yield() = 0
sched_yield() = 0
sched_yield() = 0
sched_yield() = 0
....

strace of {mksquashfs},9598;
futex(0x92c6998, FUTEX_WAIT_PRIVATE, 5745, NULL

strace of {mksquashfs},9599:

strace of {mksquashfs},9600:
futex(0x92c6100, FUTEX_WAIT_PRIVATE, 73393, NULL) = -1 EAGAIN (Resource temporarily unavailable)
futex(0x92c6100, FUTEX_WAIT_PRIVATE, 73396, NULL

strace of {mksquashfs},9601:
futex(0x92cb368, FUTEX_WAIT_PRIVATE, 852, NULL

strace of {mksquashfs},9602:
futex(0x92c6100, FUTEX_WAIT_PRIVATE, 73396, NULL

strace of {mksquashfs},9603:
futex(0x92cb368, FUTEX_WAIT_PRIVATE, 851, NULL) = -1 EAGAIN (Resource temporarily unavailable)
futex(0x92cb368, FUTEX_WAIT_PRIVATE, 852, NULL

strace of {mksquashfs},9604:
futex(0x92c6100, FUTEX_WAIT_PRIVATE, 73394, NULL) = -1 EAGAIN (Resource temporarily unavailable)
futex(0x92c6100, FUTEX_WAIT_PRIVATE, 73396, NULL

strace of {mksquashfs},9605:
futex(0x92cb368, FUTEX_WAIT_PRIVATE, 849, NULL) = -1 EAGAIN (Resource temporarily unavailable)
futex(0x92cb368, FUTEX_WAIT_PRIVATE, 852, NULL

strace of {mksquashfs},9606:
futex(0x92c6100, FUTEX_WAIT_PRIVATE, 73395, NULL) = -1 EAGAIN (Resource temporarily unavailable)
futex(0x92c6100, FUTEX_WAIT_PRIVATE, 73396, NULL

strace of {mksquashfs},9607:
futex(0x92cb368, FUTEX_WAIT_PRIVATE, 850, NULL) = -1 EAGAIN (Resource temporarily unavailable)
futex(0x92cb368, FUTEX_WAIT_PRIVATE, 852, NULL

strace of mksquashfs,9596 with -f option (to follow children):
...
[pid 9596] sched_yield() = 0
[pid 9596] sched_yield() = 0
[pid 9596] --- SIGALRM (Alarm clock) @ 0 (0) ---
[pid 9596] sigreturn() = ? (mask now [])
[pid 9596] sched_yield() = 0
[pid 9596] sched_yield() = 0
...
pid 9596] sched_yield() = 0
[pid 9599] <... futex resumed> ) = -1 ETIMEDOUT (Connection timed out)
[pid 9599] gettimeofday({1302110049, 888547}, NULL) = 0
[pid 9599] futex(0x80e17a0, FUTEX_WAKE_PRIVATE, 1) = 0
[pid 9599] clock_gettime(CLOCK_REALTIME, {1302110049, 888637707}) = 0
[pid 9599] futex(0x8363de4, FUTEX_WAIT_PRIVATE, 4655307, {0, 249909293} <unfinished ...>
[pid 9598] <... futex resumed> ) = ? ERESTARTSYS (To be restarted)
[pid 9596] --- SIGALRM (Alarm clock) @ 0 (0) ---
[pid 9598] futex(0x92c6998, FUTEX_WAIT_PRIVATE, 5745, NULL <unfinished ...>
[pid 9596] sigreturn() = ? (mask now [])
[pid 9596] sched_yield() = 0
[pid 9596] sched_yield() = 0
...

(gdb) thread apply all bt full:

Thread 11 (Thread 0xf6ca4b70 (LWP 9598)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92c6970) at mksquashfs.c:457
        data = <value optimized out>
#3 0x080514d1 in writer (arg=0x0) at mksquashfs.c:2314
        file_buffer = 0xe7ef070
        off = 1006143431
        write_error = 0
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 10 (Thread 0xf64a3b70 (LWP 9599)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f9884 in pthread_cond_timedwait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x0804b1f4 in progress_thrd (arg=0x0) at mksquashfs.c:2521
        timeval = {tv_sec = 1302110661, tv_usec = 973737}
        timespec = {tv_sec = 1302110662, tv_nsec = 223737000}
        itimerval = {it_interval = {tv_sec = 0, tv_usec = 250000}, it_value = {tv_sec = 0, tv_usec = 250000}}
        winsize = {ws_row = 0, ws_col = 0, ws_xpixel = 0, ws_ypixel = 0}
#3 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#4 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 9 (Thread 0xf5ca2b70 (LWP 9600)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92c60d8) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051345 in deflator (arg=0x0) at mksquashfs.c:2375
        write_buffer = 0xd98c8e8
        stream = 0xb413a30
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 8 (Thread 0xf54a1b70 (LWP 9601)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92cb340) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051241 in frag_deflator (arg=0x0) at mksquashfs.c:2413
        compressed_size = 15364
        file_buffer = 0x116b6fe0
        write_buffer = 0xe7ef070
        stream = 0xf6b18b8
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 7 (Thread 0xf4ca0b70 (LWP 9602)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92c60d8) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051345 in deflator (arg=0x0) at mksquashfs.c:2375
        write_buffer = 0xead400c8
        stream = 0xb414320
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 6 (Thread 0xf449fb70 (LWP 9603)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92cb340) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051241 in frag_deflator (arg=0x0) at mksquashfs.c:2413
        compressed_size = 13340
        file_buffer = 0xb8c6ed8
        write_buffer = 0xf15c0228
        stream = 0x92d33c8
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 5 (Thread 0xf3c9eb70 (LWP 9604)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92c60d8) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051345 in deflator (arg=0x0) at mksquashfs.c:2375
        write_buffer = 0xda4caf8
        stream = 0xb414360
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 4 (Thread 0xf349db70 (LWP 9605)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92cb340) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051241 in frag_deflator (arg=0x0) at mksquashfs.c:2413
        compressed_size = 8789
        file_buffer = 0xe64ebf8
        write_buffer = 0xf0fa01d0
        stream = 0xb3d18a0
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 3 (Thread 0xf2c9cb70 (LWP 9606)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92c60d8) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051345 in deflator (arg=0x0) at mksquashfs.c:2375
        write_buffer = 0xdb2cd60
        stream = 0xb4143a0
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 2 (Thread 0xf249bb70 (LWP 9607)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf76f94dc in pthread_cond_wait@@GLIBC_2.3.2 () from /lib/libpthread.so.0
No symbol table info available.
#2 0x08050fd4 in queue_get (queue=0x92cb340) at mksquashfs.c:457
        data = <value optimized out>
#3 0x08051241 in frag_deflator (arg=0x0) at mksquashfs.c:2413
        compressed_size = 20408
        file_buffer = 0xf791b68
        write_buffer = 0xc709608
        stream = 0xf0e204c0
        oldstate = 0
#4 0xf76f4cc9 in start_thread () from /lib/libpthread.so.0
No symbol table info available.
#5 0xf763a6ae in clone () from /lib/libc.so.6
No symbol table info available.

Thread 1 (Thread 0xf75696c0 (LWP 9596)):
#0 0xf7723430 in __kernel_vsyscall ()
No symbol table info available.
#1 0xf760f8ec in sched_yield () from /lib/libc.so.6
No symbol table info available.
#2 0x08057a09 in main (argc=3, argv=<value optimized out>) at mksquashfs.c:4779
        buf = {st_dev = 0, __pad1 = 0, __st_ino = 0, st_mode = 0, st_nlink = 0, st_uid = 0, st_gid = 0, st_rdev = 0,
          __pad2 = 0, st_size = 0, st_blksize = 0, st_blocks = 0, st_atim = {tv_sec = 0, tv_nsec = 0}, st_mtim = {
            tv_sec = 0, tv_nsec = 0}, st_ctim = {tv_sec = 0, tv_nsec = 0}, st_ino = 0}
        source_buf = {st_dev = 21, __pad1 = 0, __st_ino = 293859759, st_mode = 16877, st_nlink = 21, st_uid = 0, st_gid = 0,
          st_rdev = 0, __pad2 = 0, st_size = 460, st_blksize = 4096, st_blocks = 0, st_atim = {tv_sec = 1301538668,
            tv_nsec = 859741929}, st_mtim = {tv_sec = 1301539108, tv_nsec = 659745930}, st_ctim = {tv_sec = 1301539136,
            tv_nsec = 59747352}, st_ino = 293859759}
        i = <value optimized out>
        sBlk = {s_magic = 1936814952, inodes = 131210, mkfs_time = 1301539226, block_size = 131072, fragments = 5352,
          compression = 0, block_log = 17, flags = 192, no_ids = 0, s_major = 4, s_minor = 0, root_inode = 84226939007,
          bytes_used = 0, id_table_start = 0, xattr_table_start = 0, inode_table_start = 0, directory_table_start = 0,
          fragment_table_start = 0, lookup_table_start = 0}
        b = 0x0
        root_name = 0x0
        nopad = 0
        keep_as_directory = 0
        inode = 84226939007
        readb_mbytes = 64
        writeb_mbytes = 512
        fragmentb_mbytes = 64
        s_minor = 0