I don't think I ever heard anyone say "lolcats", but I always assumed "lollcats".
One way to check is for "a lolcat" vs. "an LOLcat". "A lolcat" (suggesting a pronunciation starting with "l") is more frequent on google (about 7 times more common than "an lolcat). If you do the same search on icanhascheezburger.com only (the authoritative source on lolcats), you get a similar result (it's now about 10 times as frequent).
Considering such puns as
Philolsophers and
lolcavore, which wouldn't work if you'd pronounce the letters seperately, I tend to think that "loll-cats" or "lole-cats" would be the default pronunciation.
Of course, LOLcatz still occurs, as with the makers of this
quiz. (Since the quiz isn't funny, I'm not sure it should count...)