I assume you are using the script you used on cheyenne, which won't work on derecho, as you've discovered. We recently installed ILAMB on casper and it is working for at least two of us in TSS. The installation is here:
/glade/campaign/cesm/community/lmwg/diag/ILAMB
There is a README in that directory that provides instructions on how to create an ilamb environment and run ILAMB.