Do you have to use lilo?
Could you use grub or syslinux?
I have never heard anything about 1 lilo boot floppy not working on another machine i have switched intire harddrives useing lilo i just had to unload and reload some modules and do a couple of other things with the kernel.
Im not really sure on how to use lilo to build a live cd.
I use grub or syslinux but ill look into it.
Sure there is away to do what yout talking about.
If you can think it up it can be done.