Oddly enough, I have had a very similar issue at the airfield where I am based. This has an information service, and the controllers will frequently respond "report lined up," or sometimes "report lining up" when I report ready for departure.
Apart from possible confusion between the two phrases, does " lining up" apply as soon as you leave the hold , or only when you have reached the numbers and are pointing in approximately the right direction?
I was sufficiently concerned over this to take a look at the CAP, and if I understand it correctly, the only time you should be asked to report lined/ing up is when you are cleared to backtrack the runway. It is not a correct response to the call "ready for departure."
Can anyone out there state whether this is right?