I don't think this is an oversight or blind spot. Whether the character sleeps or rests otherwise is their private matter and not relevant to the mechanics that D&D 3.5 cares about.
There are rules saying “In a day of normal walking, a character walks for 8 hours. The rest of the daylight time is spent making and breaking camp, resting, and eating,” and a lot of more details elaborating on this. That means that a D&D character can't just choose to skip sleeping and spend that time actively on exploration, and this applies whether the character is a human, an elf, or a lich. There's also a rule that Xykon referenced about creating magic items: “The caster works for 8 hours each day. He cannot rush the process by working longer each day.” So the same applies there: whether the spellcaster sleeps the rest of the time is irrelevant. You would perhaps need a rule for how much time each day Redcloak and Xykon needs for the Gate ritual, which takes “a few weeks”. I don't think D&D 3.5 talks about rituals with such long casting time, though perhaps there's something in the epic spellcasting rules.