According to your post you have 3 hard drives and XP is on the first partition of the third hard drive. Since windoze is not smart enought to install itself on anything but the first hdd you would needed to trick it into installing on the third hard drive. Did you?
Not exactly true. XP(or all flavors of Windows based on NT) can be installed to any partition of choice. The boot loader however will always go to hda.

My WAG why lilo bark could be that it tries to verify the hdc1 boot sector for signature but failed as there isn't such a thing there. The boot loader is at hda1. Since it is lilo, it should have been saved somewhere when lilo replace the boot sector(be it MBR or partition one) with its own. it should be under /boot/ if memory serve. However, I don't think lilo can chainload an on-disk file(this is why I like GRUB, much flexible).

edit:

try to see if there is /boot/boot.0301 or /boot/boot.0300

As for how to restore it, I need to know your configuration, the whole partition list for each drive before I can think of a possible solution.