[CentOS] Problem with checkinstall

I installed checkinstall 1.6.2 on CentOS 5.4 VM (VMWare Server on 
WinXP). After getting the dependencies installed it compiled with no 
errors. But when I run it in its own source directory, I keep getting an 
error that I can't track down. The message is:

install: cannot change ownership of '/usr/local/lib/installwatch.so': No 
such file or directory.

But not only does the file exist, it has the correct permissions and 
creation time. I am running this as root. I did change the permissions 
on both make and install to 0755, but that did not help. The command 
line is:

checkinstall -R --install=no

Any suggestions?

Bob McConnell
N2SPP