The goal here is to have a "1GB" (the smallest possible) EBS 'virtual usb stick' that can boot and run Alpine Linux.

Create an EBS backed Alpine Linux AMI

Note: You need to do this process at least once in each availability region. EBS can't be shared between Ireland and California, for instance.

Create an Amazon instance in the desired availability region. A micro instance is fine - we will need it only long enough to create our EBS usb stick.
Create a new 1GB EBS volume
Attach the new volume to the running instance
The new volume will have a name like /dev/xvdf or such
Format the volume as ext4
mke2fs -t ext4 /dev/xvdf
Do not partition it - just format the whole volume
wget a x86_64 iso and extract it to the new volume. 32bit will not work.

wget http://dl-4.alpinelinux.org/alpine/v2.4/releases/x86_64/alpine-virt-3.6.2-x86_64.iso
mkdir target
mkdir source
mount /dev/xvdf target
mount -o loop alpine-virt-3.6.2-x86_64.iso source
cp -av source/boot target
cp -av source/apks target
umount source

Create a grub.conf on the new partition.

mkdir -p target/boot/grub
cat - >target/boot/grub/grub.conf <<EOF 
default=0
timeout=3
hiddenmenu

title Alpine Linux
root (hd0)
kernel /boot/vmlinuz-virthardened alpine_dev=xvda1:ext4 modules=loop,squashfs,sd-mod,ext4 console=hvc0 pax_nouderef BOOT_IMAGE=/boot/vmlinuz-virthardened
initrd /boot/initramfs-virthardened
EOF

Syslinux automatically adds BOOT_IMAGE to the kernel command line; grub does not, so make sure you specify it in the grub.conf
You do not need any other grub files - just boot.conf

symlink the grub.conf to menu.lst

ln -sf ./grub.conf target/boot/grub/menu.lst

Create an amazon.apkovl.tar.gz file to put on the target
- This is probably easiest on a local alpine linux instance. Make sure the following are configured:
  - eth0 uses dhcp
  - networking is set to autostart
  - sshd is installed and set to autostart
  - Your ssh public key is in /root/.ssh/authorized_keys
  - The root password is set to something
  - lbu include root/.ssh
  - (optional) - Delete the /etc/ssh/*key* files, so they are created on the new box
- lbu package amazon.apkovl.tar.gz
  
  Warning: If you are packaging on a 32bit box, manually delete etc/apk/arch from the apkovl.tar.gz file
- Copy amazon.apkovl.tar.gz to target/
Unmount target
Do the following from the Amazon web interface
- Detach the new volume
- Make note of the volume ID
- Launch NEW instance. Use defaults, amazon linux, micro; we are going to canibalize it in a bit, so defaults are fine here.
- Once the instance starts, stop but do not terminate the instance.
- Under EBS, detach the existing volume, and attach the alpine linux volume as /dev/sda1 (note the 1 at the end)
- Restart the instance
Log in and make sure it works
Do any final cleanups necessary, and if necessary lbu ci
- Only make configs that are appropriate for an AMI, we are going to snapshot this instance and create an AMI out of it
Again from the Amazon web interface
- Delete the 8GB volume that is no longer needed
- Stop but do not terminate the instance
- Right click the stopped instance and choose 'Create Image (EBS AMI)'
  - Image name should be unique for the image - example AlpineLinux-2.4.5
  - Description can be anything - example 'Base AlpineLinux Installation - no services'
Done.