This is how we used to do the squashedfs on the dm500 boxes
So you need to find what mtdblock the jffs2 is on
mount it to say /tmp/root
tarball it
copy to a linux desktop and untar it.
have a play then
./mkfs.jffs2 --disable-compressor=lzo --compression-mode=size --eraseblock=0x20000 -p -n -l --pagesize=0x800 --root=$DEST_ROOT --output=update/tmtwin/cfe/oe_rootfs.bin
The --root=$DEST_ROOT would depend but following this as a rough guide it would be --root=./root the ./root means where I am and I can see /root with an ls you could put --root=/tmp/root
So long as the mkfs.jffs2 supplied by tm is on the desktop it will work without any need for a build environment.
To be honest it should work on the box without the need to tarball it up at all unless there is not enough memory, you could put the mkfs.jffs2 file in the /bin directory on the box and leave it there.