See the home sites.
They come from the Official sites (see Getting Bzip2 for where.
If you have gcc 2.7.*, change the line that reads
CFLAGS = -O3 -fomit-frame-pointer -funroll-loops
CFLAGS = -O2 -fomit-frame-pointer
that is, replace -O3 with -O2 and drop the -funroll-loops. You may also wish to add any -m* flags (like -m486, for example) you use when compiling kernels.
Avoiding -funroll-loops is the most important part, since this will cause many gcc 2.7's to generate wrong code, and all gcc 2.7's to generate slower and larger code. For other compilers (lcc, egcs, gcc 2.8.x) the default CFLAGS are fine.
After that, just
make it and install it per the README.