I have a compaq presario 2412ES system with phoenix bios version 4.0 release 6. I cant get lilo to work with my 1 GB IDE hard disk. It displays L 80 80 80 80.. on boot. The same hard disk worked fine with LILO on an AMI BIOS. Attempting to put a 4.3GB hard disk in place of the 1GB worked ok with lilo booting up perfectly on the 2412ES. i guess its the combination of a 1 gig hdd+phoenix bios that screwed things up...somewhere.
According to the error message you are getting it is probably a bios configuratio n problem with the drive you were using. Check /usr/doc/lilo-0.21/doc/User_Guide.ps for more detail on the error message you are getting.