What is wrong with just using union mounts[1]?  You can
mount multiple obj dirs on top (to build for different
archs, for example) as well as do a make from any subdir
without having to use fancy make features.  On machines
where you can't have union mounts you can use a symlink
builder that creates shadow dirs and symlinks to all of the
source files (though this is not as neat as the union mount
-- you need to modify some tools if you want the ability to
do local modification).  I've use the symlink trick ever
since symlinks were available (BSD 4.1c?).

-- bakul

[1] I like to think of 4.4 BSD's union mounts as `overlay'
mounts as since `a union b' is a commutative operation
(which makes no sense for files), while `a overlay b' is not
and union mounts have the latter semantics.