Any ideas?

Stop digging before you've ruled out the most simple things

Step 1, step out of cpan, cpan>look Module and run perl Makefile.PL yourself, and confirm

perl -V:
<P>Confirm all paths, eg <C>perl -V:make -V:perlpath -e " die $^X
[download]

Look inside Makefile for path to perl.exe

I ran your command, and it looks okay to to me.

C:\strawberry\cpan\build\OLE-Storage_Lite-0.19-pT5XuU
> perl -V:make -V:perlpath -e " die $^X"
make='dmake';
perlpath='C:\strawberry\perl\bin\perl.exe';
C:\strawberry\perl\bin\perl.exe at -e line 1.
[download]

After the perl Makefile.PL command, I look in the Makefile and see:

C:\strawberry\cpan\build\OLE-Storage_Lite-0.19-pT5XuU
> find "perl.exe" Makefile

---------- MAKEFILE
PERL = C:\strawberry\perl\bin\perl.exe
FULLPERL = C:\strawberry\perl\bin\perl.exe
          perl.exe so_locations \
FULLPERL      = C:\strawberry\perl\bin\perl.exe
[download]

Any more suggestions?

Any more suggestions?

In my version of Strawberry, when I build IO-React-1.03, there's no problem.
When I look at the generated Makefile I see:

DIRFILESEP = \\
DFSEP = $(DIRFILESEP)
[download]

Next I open up lib/ExtUtils/MM_Win32.pm and I find in it:

sub init_DIRFILESEP {
    my($self) = shift;

    # The ^ makes sure its not interpreted as an escape in nmake
    $self->{DIRFILESEP} = $self->is_make_type('nmake') ? '^\\' :
                          $self->is_make_type('dmake') ? '\\\\'
                                                       : '\\';
}
[download]

So I change the dmake setting (from 4 backslashes to 2) so that the sub now reads:

sub init_DIRFILESEP {
    my($self) = shift;

    # The ^ makes sure its not interpreted as an escape in nmake
    $self->{DIRFILESEP} = $self->is_make_type('nmake') ? '^\\' :
                          $self->is_make_type('dmake') ? '\\'
                                                       : '\\';
}
[download]

Now ... have another go at building IO-React-1.03 (having first run 'dmake realclean'):

C:\sisyphusion\IO-React-1.03>perl makefile.PL
Checking if your kit is complete...
Looks good
Writing Makefile for IO::React
Writing MYMETA.yml and MYMETA.json

C:\sisyphusion\IO-React-1.03>dmake
dmake:  Error: -- `C:\_32\strawberry514\perl\libConfig.pm' not found, 
+and can't be made
[download]

Sure enough, when I look at the generated Makefile, I now find it's the same as yours wrt DIRFILESEP:

DIRFILESEP = \
DFSEP = $(DIRFILESEP)
[download]

Your generated Makefile is wrong ... plain and simple ... you need to remedy whatever it is that keeps generating this fucked Makefile.

In the above MM_Win32.pm sub, does $self->is_make_type('dmake') return true for you ?
In essence, you just need to modify that sub so that it returns \\\\ (4 backslashes) for you. Even if you just do it as:

sub init_DIRFILESEP {
     return '\\\\';
}
[download]

That should do it.

Cheers,
Rob

But where does that key get set?

There's init_MAKE(), which sets it (if it's not alredy set at this point) from the environment, or else from $Config{make} (which should be what you get via perl -V:make )

sub init_MAKE {
    my $self = shift;

    $self->{MAKE} ||= $ENV{MAKE} || $Config{make};
}
[download]

A couple of well-placed prints can answer many questions, e.g. allow you to check whether the value is what you'd expect, or something funky

sub init_MAKE {
    my $self = shift;

    print STDERR ">>> before: '$self->{MAKE}'\n";
    $self->{MAKE} ||= $ENV{MAKE} || $Config{make};
    print STDERR ">>> after:  '$self->{MAKE}'\n";
}
[download]

(and if you don't get any print output at all, you'll at least know you're executing something else entirely...)

P.S. For a discussion of !!, see Perl Idioms Explained - !!expr and Secret Perl Operators: the boolean list squash operator, x!! (and probably others) — if generally interested, it's not really relevant to the problem at hand.