Here's what a get from "Linux Kernel Insternals" : Startup Messages : LI : the first step of the loaderhas been able ro load the second step whose processing then failed. This can be caused by an incorrect geometry or by repositionning the file boot.b without reinstalling the loader.
Also, is your version of LILO able to deal with kernels beyond the 1024th cylinder of the boot partition ? This limitation has only recently been left off, and could arise if you use your disk in normal mode. Anyway simply try to re-run LILO.