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There are currently no EInk Readers that support DRMed LIT. As you say, the Hanlin V3 has DRM-free LIT support, but LIT isn't one of its best supported formats (FB2 and MOBI are better).
The ConvertLIT program can strip DRM and "explode" the LIT to OEB. The clit program you mention is probably ConvertLIT, and it can strip the DRM even under Linux if you get first generate a key file under Windows. Note that removing DRM, even for personal use on ebooks you own, is not thought by some to be legal in the US and some other places. ConvertLIT is not perfect at conversion, but Calibre (has its own forum here) is significantly better. It only works on DRM-free ebooks, so use ConvertLIT (or I prefer "ConvertLIT GUI" under Windows) to strip the DRM only (leaving a DRM-free LIT) and than Calibre to convert to MOBI or ePub. LIT is a good format to convert from, and either MOBI or ePub should work well. Since almost all EInk devices provide good support for one or the other, this has not narrowed your choice at all.
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