Same thing happened to me!
CIC procesed my work permit, even though I told them I was waiting for LMO.
got told as above to restore status within 90 days, & pay $200 restoration fee for each for my family (3 of us) as well as the new application fees.
Called CIC with my LMO approval number, guy told me it would be easer for me to go to an entry port ( I stay near Toronto so went to Niagra Falls) leave Canada to the u.s, & turn around & re-enter Canada, reapply at 'port' as a new application & bingo, no restoration fees.
The process took about 2hrs total, including walking across the Rainbow bridge to U.S., getting my I90 card & going straing back to Canada!!
Total cost was $300 for my work permit,my wifes open spousal work permit, and my daughters open visitors permit(7 year old).
hope it helps 4 you 2!.
