You are basically doing everything wrong.
The 68040.library needs to be placed in your SYS:LIBS folder, and that's it. There is no built-in library in the flashrom of your PPC card, other than ppc.library PowerUP kernel, for which you need to use BPPCFix module of BlizKick, if you'd like to disable it so that you could use WarpUP kernel.
For 68k stuff, simply place your wanted 68040.library revision into SYS:LIBS and you are all set.