The MPlayer source is packaged as 'MPlayer-....tar.bz2'
Where did you pulled this archiv?
tar: /home/src/AV/mplayer/mplayer-1.0rc2.tar.gz: Cannot open: No such file or directory

The mplayer-1.0rc2-i486-50.2 package misses these patches:
./build-mplayer.sh: line 44: /home/src/AV/mplayer/MPlayer-1.0rc2-with-dvdnav.patch: No such file or directory
./build-mplayer.sh: line 45: /home/src/AV/mplayer/dvdnav_aspect.patch: No such file or directory

Ok, found some info here: http://onebithq.com/root/mplayer/dvdnav/download
    * This patch required libdvdnav from mplayerhq.hu
    * It is a good idea to use '-mouse-movements' options.

These patches are in the package but not used by the build script:
  cddb_fix_20070605.diff
  mplayer-1.0rc1-window-icon.patch
Are they not needed anymore?

BTW, I'm using this helperline to make sure there are no errors and patches are copied
# 1 - strip, 2 - patch
function patch_file() { patch ${1} < $CWD/${2} || kill $$; cp $CWD/${2} $PKG/usr/src/$PKGNAME; }

Edit:
MPlayer don't even likes '-O2' -  a notable exception - and works best with as few options as possible!