Surprisingly, it appears to be an Americanism. Additionally, the word appears in certain etymologies as "lallygagging"...
"Lollygag is American born and bred. It made its first appearance in print in the 1860s. The indefatigable Evan Morris, known to his fans as The Word Detective, says the clue might be in "loll." Morris says this "is a very old word originally meaning 'to droop or dangle'. We use 'loll' today to mean to relax or pass time idly, the sort of behavior that vacations are designed to encourage. There seems to be a plausible connection between this 'utterly relaxed' meaning of 'loll' and the 'wasting time' sense of lollygag."
Further, Answerprancer may not be that far off base... "According to the Cassell Dictionary of Slang, "loll" is also an old dialect word that means 'tongue'. That might elucidate the kissing part. To make things even sloppier, Barnhart Dictionary of Etymology suggests the 'gag' in lollygag was employed for its sense of 'stuffing', or 'filling'. This leaves us with a vivid picture of a tongue being thrust down the throat.
This picture of tongue-thrusting is further supported by an 1868 tirade from an Iowa newspaper, the Northern Vindicator, writing of "the lascivious lolly-gagging lumps of licentiousness who disgrace the common decencies of life by their love-sick fawnings at our public dances."
Somethings never change...