Hi Richard,
I used to try Denemo in the past but long time ago so my answer may not be that much accurate.
From your error message, it seems that you put my lilypond.lang in denemo directory.
Language file describing the keyword, comment... have to be in gtksourceview-3.0/language-specs, either in your .local/share or in /usr/share.
The directory you put the language file ($(PREFIX)/share/denemo/) is most likely the place for denemo other kind of file but not language-specs file :-)
Place the file in $HOME/.local/share/gtksourceview-3.0/language-specs and try if you get lilypond coloring in gedit for example.
If it works (which should be the case), try in denemo.
If it works in gedit and not in denemo... Then the issue is denemo related.
I hope this help.
Regards
JipE