These instructions are needlessly complicated. I'll update them when https://jira.toolserver.org/browse/TS-757 is done.
If you cannot wait so long, download local::lib from http://search.cpan.org/dist/local-lib/ yourself and follow the bootstrap method in the documentation. In any case, the CPAN config file will be taken care of automatically. For comparison, I have posted my very reasonable configuration suited for the toolserver at http://paste.scsys.co.uk/50703.