Yes, I have developed a solution to the TXTFMT problem, though it doesn't involve any LIT files.
Far and away the best solution to the problem is to find a Microsoft Word expert who can convert the TXTFMT docs into Word, and from there create whatever you need: printed pages, PDFs, HTML (for on-line) or CHMs (real Windows help files).
Because your docs are now in Word, they will be:
* easy to update, modify and improve forever
* never get technologically left behind
* teaching your writers how to use the world's word processor of choice
* provide more or less unlimited flexibility and options for the unknown future
* supportable and maintainable by anybody who knows Word
* transferable to customers/clients in native and familiar format
Somebody who knows Word well can do most of the conversion work with global find-and-replace options, and build macros to handle most of the rest.
While converting an entire library of 20/30 year old TXTFMT documentation to Word is not a trivial project, a slow-and-steady approach could get it done over a reasonable period of time.
I'm so glad you asked!