I just tried the http 1.1 vs http 1.0 on the clean demosite account I had made under cpanel
LiteSpeed is definitely returning it's default 404 error page under HTTP 1.0 when there is an ErrorDocument present in htaccess
I will do a test with CURL to capture the exact http stream for 1.1 and 1.0
I have tested this in IE/Firefox/Opera - all fail the errordocument.
If you are getting different results on your test setup, then obviously this is a httpd.conf issue with the default cpanel setup I have, or possibly some option I have turned on inside LiteSpeed's config ?