Actually, in US English, "lieu" is quite often pronounced with a hard L, making it a homophone with "loo".
Similarly with "duke" (герцог), "tulip" (тюльпан), "dew" (роса), and "new"/"news" (новый/новости) -- in US English (or some dialects of US English), the consonants before the "u" are more often pronounced hard (ду, ту, ну) but in UK English, they may be pronounced soft (дю, тю, ню).
I would also add that in US English, although the hard pronunciation is frequently heard, using the soft consonants for these words also sounds "normal", and not "affected". (Using British or French-style pronunciation can sometimes sound affected or grandiose in US English, but not with the words I listed above.)
I hope this doesn't make things more confusing for LurkingDarkness -- my point was that if you're aware that in some dialects of English, the words "do" (делать) and "dew" (роса) are pronounced quite differently (with a "hard Д" in the first word and a "soft Д" in the second one) then the same basic difference applies to "hard Л" and "soft Л".
American English is shifting away from the soft consonants, as in lieu and dew. I should have mentioned that. Throbert has complete agreement from me about these points. People that use the hard pronunciation variants sometimes have a hard time noticing the difference between the hard and soft. They can't tell what softness is.
You can hear many variants, including the Russian type of soft d.
Some other consonants in English sometimes in soft mode: dueling mewling pew rue imbue (some of these also heard in hard mode) whew! No Russian soft w, I know.
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