The LI essentiaally means the second stage loader was loaded but was unable to find/load the actual OS.
You say your boot partition is before cyl 6 and I assume it's a small partition say 20 Megs or so. I also assume you are not confusing "/boot"with the root partition "/"
Your entire boot bartition must exist below cyl 1024.
1st - check that your boot partition is set to active.
2nd - if you built your own kernel, make sure that the drivers for your disk/controller are compiled into the kernel (not as modules) the same goes for ext2 filesystem support.
3rd - if you did build your own kernel did you copy it to the boot partition along with the System.map file (on Red hat I believe it has a version number attached that's the same as the kernel version) Then update your /etc/lilo.conf and finally run lilo
I usually make a boot partition of about 20megs as the 1st partition on the boot drive.