hmm, as far as I know, Xcode 3 does not work on Lion, at least not officially. I gather if you just installed the said dmg then Xcode Toolset component did not install, see http://anatomicwax.tumblr.com/post/7906770311/installing-xcode-3-2-6-on-lion (there are also instructions how to make it installed --- perhaps this will help)
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