Just found out you can get hostapd to show more debug messages, this is what I'm currently getting:

root@Omega-92CA:/etc/config# hostapd -d /etc/hostapd/hostapd.conf
Configuration file: /etc/hostapd/hostapd.conf
nl80211: 'nl80211' generic netlink not found
Failed to initialize driver 'nl80211'
wlan0: interface state UNINITIALIZED->DISABLED
wlan0: AP-DISABLED
wlan0: CTRL-EVENT-TERMINATING
hostapd_free_hapd_data: Interface wlan0 wasn't started

And this is my hostapd.conf file:

interface=wlan0
bridge=br0
country_code=AUS
ctrl_interface=wlan0
ctrl_interface_group=0
ssid=KITT
hw_mode=g
channel=1
wpa=3
wpa_passphrase=georgeisyourfriend
wpa_key_mgmt=WPA-PSK
wpa_pairwise=TKIP
rsn_pairwise=CCMP
beacon_int=100
auth_algs=3
macaddr_acl=0
wmm_enabled=1
eap_reauth_period=360000000