As markschmid suggested, it's starting to look like a serious disk controller incompatibility.
I just don't understand how it copied over the files when you installed to the hard drive.
Have you tried copying as root if your knoppix user is somehow messed up?
If you manage to post lilo.conf here, you might as well post /etc/fstab.
You could also try mounting the floppy with: sudo mount /dev/fd0 /floppy

Lastly, you could consider downloading the newest knoppix and installing again, just in case your cd is faulty, or the newer revision has better drivers.

Alternatively you can hope that someone who actually knows the solution catches on
For me it's beginning to look like a mystery