You need to have a fptools/mk/build.mk which looks like this in 
order to build Hugs which has a hope of working in combined mode.

WithGhcHc=ghc-4.06      # or whatever; version not v. important
GhcLibWays=u            # essential
GhcHcOpts=-DDEBUG -fasm-x86    # -fasm-x86 is optional
GhcRtsHcOpts=-optc-DDEBUG -optc-D__HUGS__ -unreg -optc-g
GhcRtsCcOpts=-optc-DDEBUG -optc-g -optc-D__HUGS__
SplitObjs=NO            # essential