Actually I have had many problems trying to hand compile CPAN modules, especially GD. It's usually preferable to let cpan do it.

OK, I ran the script with debug enabled and I found that the error was due to a string that concatenated a file name to a directory name. It added the Windows '\' to the directory path. All is working fine now. Thanks everyone for your help.

To summarize, the fix for the problem was to uninstall/re-install libgd and the GD module:

Uninstall/re-install libgd:

brew uninstall libgd
brew install libgd --with-freetype --with-libtiff --with-libvpx
brew info libgd
[download]

I added libtiff and libvpx support in case I ever need it but I don't believe they are necessary in this case.

Install pm-uninstall:

cpan App::pmuninstall

Uninstall/re-install GD:

pm-uninstall GD
cpanm GD
[download]

If tests fail:

cpanm -f GD

Force install only if tests fail. This is not optimal for certain, but it did work in this case. GD is notoriously difficult to install.