Well the subject says it all, my dual pII 333 at work, with aic-7880 had LI when I skiped the boot loader part, due to the fact that the installer does not like my lilo set up I am not sure why I go LI, for I told the upgrade to skip the boot loader part :)
Lilo configuration cannot be skipped if you want the system to reboot properly. An upgrade will install a newer kernel and other files that will be located in different spot on the hard drive. Lilo during the install/upgrade records the new locations so the system may boot properly. Try using the lilo configuration and see if you still have this problem.