Ok, I solved my own problem. But in the process, I believe I discovered a bug or at least an annoying quirk. On my desktop, I have a total of 3 drives. Two internal, and one external. On my first drive (sda), I have windows vista. On my second drive (sdb), I have Vector Linux. And the finally, the external (sdd) drive is a fat32 storage bank with no OS or system installed on it.
So my problem was that Lilo kept complaining about an elusive drive labeled sdc. Well, I finally figured out what it was. I have a brand new printer. A canon MP600 to be more precise. Well... One of the features of this printer is that it lets you plug in a little flash card containing pictures or documents so that you can print them directly to the printer without having to interface to a computer. But the thing is that when the card is plugged in the printer, the operating system detects it correctly as a separate drive. But for some reason, it caused quite a bit of hardship to install lilo. Each time I would try to wipe the MBR and reinstall Lilo, it would give me this error.
Fatal: open /dev/sdc: Read-only file system
But it reality, just as with the external hardrive, there were no bootable elements on this flash card and Lilo should not have any business trying to write stuff to it. So I ended up unplugging it and was able to reinstall lilo correctly with all the right entries and theme. Has anybody had the same problem before?