Something

let extlib_compile = ref true

...

try
        let args = ref [] in
        Arg.parse [
                "-b", Arg.Clear bytecode, "don't build a bytecode version";
                "-n", Arg.Clear native, "don't build a native code version";
                "-d", Arg.Clear download_cvs, "don't download code from cvs";
                "-e", Arg.Clear extlib_compile, "compile extlib from a package instead of local source";
(*              "-c", Arg.Set_string config_ml, "compile the specified config.ml setting compile-time parameters"; *)
        ] (fun argi -> args := argi :: !args) "Usage:";

        if !extlib_compile then
                extlib_link = "-package extlib"
                oc_find = "ocamlfind ";

gives this:

File "ocaml/mtasc/doc/install.ml", line 122, characters 16-33:
This expression is not a function, it cannot be applied