Depending on your disk space requirements and how comfortable you are with building your own distro, you might have an easier time starting with a more full-fledged Live CD and stripping it down rather than starting with something stripped and building it up. It's fairly easy to remaster a Knoppix or even Ubuntu live disc by removing packages you don't need. If you search for "Knoppix remastering," you'll even find quite a few community remastered cds which you could potentially start from.