I have committed all of these errors this week:
The problem of seeing only LI after boot CAN be caused by the Linux boot
partition being on the second IDE controller as MASTER. Put it as slave
on the primary controller. (It was physically easier to put it on the
secondary..)
The problem of L101010101 being displayed indefinately is the result of
lilo not being able to see the Linux partition via the BIOS properly.
(Even when the drive is not configured in the BIOS, Win'95 and Linux can
see the drive. lilo cannot.... )
When the install boot disk asks for a ramdisk, it wants the ROOT disk you
have made. In fact, it wants the root disk still COMPRESSED (i.e.
file.gz).