Rename the current /usr/src/linux directory to something else (/usr/src/linux can be a symlink rather than an actual directory. Either way, rename it) by running:
mv /usr/src/linux /usr/src/linux-old
Remove /usr/include/linux and /usr/include/asm by running:
rm -r /usr/include/linux /usr/include/asm
Unpack the Kernel archive in the /usr/src/ directory (this will create a new /usr/src/linux directory)
Create the /usr/include/linux and /usr/include/asm symlinks by running:
cd /usr/include
ln -s ../src/linux/include/linux linux
ln -s ../src/linux/include/asm-<cpu> asm
Look in the /usr/src/linux/include directory and see which asm-* directories are present. Choose the correct one for your platform. If you're on an Intel platform, you'd run ln -s ../src/linux/include/asm-i386 asm
Choose a method to configure the kernel (see the README file for more details on configuration methods) and make sure you don't configure anything as modules at this point. This is because we won't have the necessary software available to load kernel modules for a while.
After you're done with your kernel configuration, check and set the dependencies by running:
make dep
Compile the kernel by running:
make bzImage
Copy the bzImage file to the /boot directory by running:
cp arch/<cpu>/boot/bzImage /boot/lfskernel
Replace <cpu> by the CPU type you are using like i386 on Intel system.s
Copy the entire kernel source tree to the LFS partition by running:
cp -av /usr/src/linux $LFS/usr/src
Create the $LFS/usr/include/linux and $LFS/usr/include/asm symlinks by running:
cd $LFS/usr/include
ln -s ../src/linux/include/linux linux
ln -s ../src/linux/include/asm asm