I finally managed to compile drivers for RT61 that support master mode by using v2.6.27 of rt2x00 with 004-allow-ap-vlan-modes.patch[/url221f45dk]. Latest version didn't compile with gcc-4.3.2 and g++-4.3.2.
But now that I try to start hostapd I get[code221f45dk]
Failed to set country code[/code221f45dk][/quote221f45dk]
(I was completely delusional when I last responded, so I edited it out.)
If you get errors about 'cannot set country code' or 'cannot set channel' with the newer kernel drivers and hostapd versions >0.6.6, it's probably because you don't have a recent enough version of udev that can communicate from the the userspace to the kernel for the CRDA regulation system to work. See this post for more details viewtopic.php?f=5&t=5157&p=32220#p32220