Uh, then it's serious.
I use the same and it runs, but This is strange. I didn't use the installer, though, but the jum version from
http://www.mager.org/LimeWire/LimeWire.html
Did you install 10.3.7 the same time you updated your LW?
LimeWire has a new installer, which handles rights differently, so maybe there's some bug.