Use ConvertLit to remove the DRM, but not to explode the file then the un-DRM'd lit can be run through lit2lrf (either command line or libprs500 GUI). If the book is DRM free then skip ConvertLit & go straight to lit2lrf. The command line for ConvertLit is (clit bookwithdrm.lit bookwithoutdrm.lit). If you can't get ti working PM me & I'll try to help.
These threads might help...
https://www.mobileread.com/forums/showthread.php?t=20084
https://www.mobileread.com/forums/showthread.php?t=11618
https://www.mobileread.com/forums/showthread.php?t=18285