The -g flag is "garble with password" according to the amigaguide docs, so it does seem to.
edit:
Scrap that it's legacy option for MSDOS archives and is ignored on the Amiga.
Don't know if this helps though (taken from the docs):
The -k option is for recovering corrupt data ie:
lha -k -b8 x dl:corrupt ram:
which would extract as much data as possible from the corrupt archive to 'ram:' with an 8k I/O buffer.
