What am I doing wrong ?

Did h2xs generate that XS file ? Your XS file is missing the following code:

double hypotenuse (double val_x, double val_y)
{
    return sqrt (val_x*val_x + val_y*val_y);
}
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And that code needs to be placed between the line:

#include "hypotenuse.h"
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and the line:

MODULE = Geometry        PACKAGE = Geometry
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You may subsequently find that you also need to link to libm (-lm) in order to resolve "sqrt".

Cheers,
Rob