Upgrading the system (or just the lilo package) is killing the old /etc/lilo.conf file, and not saving a copy in an .rpmsave file. The workaround is to make a backup of lilo.conf before you upgrade. The real fix is to set up /etc/lilo.conf as a %config file in the rpm....
This is the same as #5512
*** This bug has been marked as a duplicate of 5512 ***