New York was outscored 15-2 in the two-game series and has lost three in a row following a five-game winning streak.
Cedeno, starting his second straight game because Ryan Theriot has a bad back, drove in Chicago's first run in a three-run fourth, then hit his first career grand slam in the eighth against Jorge Sosa for a 7-1 lead.
Lilly (1-3) retired his first 10 batters, lowered his ERA from 9.16 to 7.30 and combined with three relievers on a five-hitter. Lilly, a 15-game winner last year, allowed one run, four hits and four walks in six innings, striking out four.
Nelson Figueroa (1-1) gave up three runs, seven hits and five walks - one intentional - in five-plus innings.
Chicago loaded the bases with no outs in the second but Cedeno took a called third strike and Henry Blanco grounded into a double play.
Then, after Cedeno's go-ahead hit in the fourth, Blanco was intentionally walked and Figueroa was late covering first base on a grounder to second that Lilly beat out for a single. Reed Johnson, starting in left field because Alfonso Soriano is on the 15-day disabled list, followed with a two-run single.
Brady Clark hit an RBI grounder with the bases loaded in the sixth.
