I am also trying to figure out how to search my music library's lyrics field -- which ALREADY has lyrics added to many of the songs -- to find, say, all the songs whose lyrics contain the words "blind" and "snow".

Spotlight does not work (and I have all the file types checked in System Prefs). iTunes Search doesn't either. And, "lyrics" is not an option for creating Smart Lists (eg, "LYRICS contains 'snow blind'").

I've read that iTunes keeps the lyrics in the xml file, so I suppose Spotlight might work if we could get it to search xml files? (but this work-around would be pretty cumbersome, I think).