I had to manually edit the lilo.conf file (after a quick lesson using vi). It seems thats running liloconfig was creating a problem in one line of the file.
boot = /dev/hda2
(my actual boot partition)
...needed to be changed to
boot = /dev/hda
... even though I had specifically typed /dev/hda in liloconfig. It seems to me that liloconfig is picking-up the wrong path designation when it writes lilo.conf.
This problem/solution had been mentioned in other threads also. Thanks for the response synaptical!
Another noob problem solved... I'm off to find another!