We only know as much as you tell us, and a makefile without the files it works on is not a lot. A silly makefile doesn't tell me a thing about your file layout,
I still don't know after asking three times if you ever fixed your use of tar, in fact the most I've gotten from you -- beyond abuse -- is one ls readout of only a quarter of the files I asked for. A real listing of
all the hardlinked input (and output) files could have been helpful(and would still be), but you treat it like an RTFM.
If you're trying to create an ISO with rock-ridge hard links, yes, that is a problem. Is the input truly Rock Ridge? Usually on livecd's I see compressed filesystems done as cramfs and the like.
Preserving hard links doesn't seem to matter to me when creating a read-only filesystem. The permissions, contents, and owners are still all as they should be, and nothing will ever be able to change it.