I have done this for a distro based off mandravia, and it was very easy considering. I just removed everything I could from a base install, then installed the kernel I wanted, removed the base kernel, and added the apps I wanted to be in the iso.
You could still use the same sources for the repos, and keep the package manager enact if you like.
Then use the mklivecd
to create an iso. It will make an exact copy of the install you are working with.