I had the same problem with Debian on the Optiplex 320, Grub just does not work on this hardware.
The key in lilo seems to be the option
pci=nomsi which if I recall had to be used at the boot: prompt to get the Debian installer to run on this machine.
This is the lilo.conf from from my Debian Etch box on an Optiplex 320
Code:
boot=/dev/sda
root=/dev/sda1
map=/boot/map
delay=20
default=Linux
image=/vmlinuz
label=Linux
read-only
# restricted
# alias=1
append="pci=nomsi"
initrd=/initrd.img
image=/vmlinuz.old
label=LinuxOLD
read-only
optional
# restricted
# alias=2
append="pci=nomsi"
initrd=/initrd.img.old
I know your issue is already solved, but I figured I'd put this here as an additional reference for future searches.