hmmmm missed this thread:
First of all - you don't have to uninstall KDE 3.5.x to get KDE4, it installs along side it so you will have both.
I'm not getting what you directing at for error with KDM, but have tried to just reinstall KDM? I would also make sure you have the kdmtheme, kdmtheme is not in equo. With kdmtheme you can than select a different kdm theme and hopefully that will fix that. I don't know if you will be able to use the Sabayon one or not. Personally I prefer the GDM and even made my own login