diff -Nur squashfs4.0/squashfs-tools/mksquashfs.c squashfs4.0.new/squashfs-tools/mksquashfs.c
--- squashfs4.0/squashfs-tools/mksquashfs.c	2009-04-06 00:22:48.000000000 +0300
+++ squashfs4.0.new/squashfs-tools/mksquashfs.c	2009-06-06 12:56:02.000000000 +0300
@@ -4491,7 +4491,7 @@
 	if(stat(argv[source + 1], &buf) == -1) {
 		if(errno == ENOENT) { /* Does not exist */
 			fd = open(argv[source + 1], O_CREAT | O_TRUNC | O_RDWR,
-				S_IRWXU);
+				S_IRUSR|S_IWUSR|S_IRGRP|S_IWGRP|S_IROTH);
 			if(fd == -1) {
 				perror("Could not create destination file");
 				exit(1);