As the portage tree on the Gentoo 2017 image may not have been updated recently, running emerge --sync can fail due to the portage package being outdated. To address this, you need to download older snapshots and use them to gradually upgrade portage to a more recent version.

Here are the snapshot downloads that worked for me: 

wget http://dev.gentoo.org/~swift/snapshots/portage-20170920.tar.bz2
wget http://dev.gentoo.org/~swift/snapshots/portage-20180120.tar.bz2
wget http://dev.gentoo.org/~swift/snapshots/portage-20180520.tar.bz2
wget http://dev.gentoo.org/~swift/snapshots/portage-20180720.tar.bz2

These files contain the portage snapshot with dates in the filenames. To update the portage package, extract these snapshots sequentially to the /usr/portage directory.

Begin by backing up the existing /usr/portage directory:

mv /usr/portage/ /usr/portage.latest

After backing up the existing /usr/portage directory, proceed to extract the oldest portage snapshot to /usr/portage.

tar xjpf portage-20170920.tar.bz2 -C /usr

Next, update the portage package after successfully extracting the oldest portage snapshot.

emerge -auv portage

Repeat the steps for each of the other snapshots, updating the portage package sequentially.

mv /usr/portage /usr/portage.20170920.old
tar xjpf portage-20180120.tar.bz2 -C /usr
emerge -auv portage
mv /usr/portage /usr/portage.20180120.old
tar xjpf portage-20180520.tar.bz2 -C /usr
emerge -auv portage
mv /usr/portage /usr/portage.20180520.old
tar xjpf portage-20180720.tar.bz2 -C /usr
emerge -avu portage
mv /usr/portage /usr/portage.20180721.old

Following these steps will position your system to restore the latest snapshot and emerge the latest portage package.

mv /usr/portage.latest /usr/portage
emerge -auv portage

Tidy up by updating the etc files that have been modified during the process.

etc-update

Additionally, confirm that your portage tree is now up to date.

emerge --sync

After completing these steps, you should be able to update your system successfully.

emerge -av system

Note: If you are running Gentoo on a memory-constrained system, it’s advisable to create a swap file and configure it for automatic mounting on boot. Failing to do so may result in compilation failures, especially when compiling GCC.

dd if=/dev/zero of=/mnt/2G.swap bs=1G seek=2 count=0
mkswap /mnt/2G.swap

Configure the /etc/fstab file to ensure automatic mounting on boot.

sudo nano /etc/fstab

Add the following line to the /etc/fstab file:

/mnt/2G.swap none swap sw,loop 0 0

Ensure that the system can locate the fstab entry and successfully mount the swap file.

swapon -a