bootloader-utils-0.3.1-alt1.1.1 creates duplicate records in /etc/lilo.conf (apparently even for newly installed kernels in some cases). Then lilo fails with 'Fatal: Duplicate label "..."'. Cause: /\/vmlinuz-\Q$version\E\s/ pattern no longer matches records created by new script due to added quotes, therefore the duplicate check fails.
Hopefully fixed in 0.3.2-alt1.