Well I was browsing through some Kannada sites the other day and all I got was big blocks.
Turned out that Gentoo and Sabayon didn't have support for displaying Kannada characters, though, I had no such problems with Hindi & Bengali characters [amongst others]. Changing the Character encoding in Firefox to Auto-detect or Unicode didn't work either. After doing a bit of searching, found the solution. So open the terminal, switch to root user and type
emerge -av lohit-fonts
fc-cache -f -v
Restart your X server (ie, Logout, login) and you should be set!