This happens when installing in advanced mode and using existing partitions. Grub2 will not install to the MBR if the first partition starts at sector 63. It will return an error saying "your core.img is unusually large ..."
The partitioning map is out of our hands because we are not touching it... we are using existing partitions, so we can't move the partitions around or anything.
We need to catch this error and inform the user while offering the option to install LiLO. LiLO should work in this use case, but grub will not.