Who says Larian has to always pick single letter, consecutive code names for early development? For all we know there may be different working titles being used internally than what Lar is willing to post publicly at this point.

Rumour was it that the 'C' in Project C stood for cash, since that was what they needed after the publisher went bankrupt during development of LMK, taking the rights to the game with them. In Divine Divinity the 3 gravestones in the bee/wasp world are a tribute to LMK (The Lady, the Mage and the Knight in English, or something else in German that also has the acronym LMK). Marian still has some stuff about LMK on his website.