Use SDK 10.5 in Xcode 4.1 on Lion
That SDK isn't "supported" by Apple on that version of Xcode. You can still try Xcode 3.2.6 on Lion http://www.cocoabuilder.com/archive/xcode/305884-xcode-3-2-6-on-lion.html to avoid keeping around Snow Leopard for the "supported" version.