Can't update entware on nas326 - failed to download package list

The url should nowadays be zyxel.ddnss.eu instead of zyxel.diskstation.eu. (Sorry, domain provider went out of business.)

But as far as I understand, latest entware is not compatible with Nas326 kernel

Don't know about latest Entware. The Entware-ng package installed Entware-ng, with kernel support down to 2.6.32. As the NSA series had 2.6.31 for the Kirkwood devices, and 2.6.24 for OxNas, I compiled special libc packages for 2.6.24. But the NAS series, with Armv7 processors, all were 3+, so no need for custom packages.

To make it more complicated, Entware-ng on Armv7 on some day updated itself to a newer Entware, but it does it conservatively, to port 'armv7sf-k2.6', which I translate to 'Armv7 soft float, kernel 2.6', instead of 'armv7sf-k3.2'. (And actually, I don't know the difference. The whole difference to get a 2.6.24 libc instead of a 2.6.32 is compiling it with the right config, and looking through the sources it only resulted in 2 shims which are dynamically inserted when the kernel didn't support a function. A lot has changed in the kernel from 2.6.32 to 3.2, but I think the interface changes to libc were considerably less.)

which is 3.10, because the minimum requested is 3.2.

Is it 3.1.0 or 3.10? 3.10 is newer than 3.2.