Its been done. I believe one of the mods here has his own disk as well.
If I were doing this, I would compile a list of the software on a lot of the already existing diagnostic CD's...
Ultimate boot cd:
http://digg.com/linux_unix/Ultimate_boot_CD_5
I think the TPU! created version is in the downloads section....
We've used the ultimate boot cd at my work for some Single board computer issues. Worked wonderfully....