I'd been under the impression it was supposed to sound like "like." however, wikipedia suggests that it's been pronounced as "litch" since Old English, which would be well before D&D.

In Middle English "lich" was apparently a possible spelling for the word that is now "like" so perhaps this is where the pronunciation of the undead to sound like "like" comes from? Apparently I should start reading it as "litch" tho...