The lilo and lilo.conf man pages are out-of-date. That is, they are very old as compared with the man pages which are in the src rpm for lilo. Specifically, all info about the lba32 option is missing and this is essential info for booting a partition cyl>1024.
Fixed. Too late for 7.0 (glen would have a heart attack if I started changing this in the tree now ;).