Apparently $APACHE_VERSION is coming back incorrectly during test..

  if test "$APACHE_VERSION" -ge 2000000; then
    { echo "configure: error: Use --with-apxs2 with Apache 2.x!" 1>&2; exit 1; }
  fi

Made version number test very large number to fake the test, configure completed without error.  Subsequent make and install completed without error.

Could you issue these two commands and let me know what it says, please?

httpd -v | head -1

and

httpd -v | head -1 | cut -f3 -d' ' | cut -f2 -d'/' | cut -f1 -d'-' | awk 'BEGIN { FS = "."; } { printf "%d", ($1 * 1000 + $2) * 1000 + $3;}'

That second one is the actual command that PHP uses to turn the version number into something it can work with.  It looks like it is getting confused somewhere along the way.

unix-stage# ./httpd -v | head -1
Server version: Stronghold/3.0 Apache/1.3.22 RedHat/3017 (Unix)

unix-stage# ./httpd -v | head -1 | cut -f3 -d' ' | cut -f2 -d'/' | cut -f1 -d'-' | awk 'BEGIN { FS = "."; } { printf "%d", ($1 * 1000 + $2) * 1000 + $3;}'
3000000

That's a million too many!  :-)

On a plain Jane Apache server this produces:

Server version: Apache/1.3.26 (Unix)
1003026

The PHP configure rule is picking up the 3.0 instead of the 1.3.22.  We'll have to fix that.  Changing sapi/apache/config.m4 to have cut -f4 instead of -f3 in the first cut command should fix it for you.  I'll come up with a general fix in a bit.

Fixed in CVS