This fellow seems to have an idea:
A script to remove all the line breaks in the file. But it's for another suite of tools, and just a .py script... not sure I fancy picking up Python just to be rid of this problem!
And worrying about the source of the admittedly crappy .lit files isn't much worth it. I'm genuinely stuck with a bunch of Dean Koontz books that are suffering this problem, as I have bought a Reader for my mother's birthday as she is an avid reader, and I figured a nice treat and encouragement to start using the expensive piece of kit was to convert her entire Koontz library over to e-book formats. Short of scanning everything, the easiest way was simply to download them again and claim fair use over it all, haha!