a. When someone does not want to IM you so they reply 'lol' to everything you say.
b. When someone does not know what to say while IMing you and they reply 'lol' to everything you say.
I wanted to talk to her, but it was that time of the month and she lolblocked me.
I told him how I really felt about him on facebook chat and he was so confused he lolblocked me.