The pins for I2C of the microcontroller on the Lilypad board could be blown. Or you use the wrong pins.
Can you upload a photo of the Lilypad with the wires ?
Can you get another Lilypad ?
If you have a I2C sensor and working code, you could try that with the Lilypad to see if the Lilypad is able to do I2C.
Or you could run the i2c scanner on the Lilypad, and try to see (with an osccilloscope) if the I2C bus has activity.
I used the line-in of a pc (with an audio-attenuator) to record the I2C activity, see the attachment, http://arduino.cc/forum/index.php/topic,159855.msg1197347.html#msg1197347
The gap at 1/3 is a device ACK to its address.