Hi watko and welcome to the GardenWeb. I saw your post early this morning but was hesitant to answer because I know nothing about the Lupin plant :-) However, since you still haven't gotten any answers, I will suggest a couple of common things that might cause the problem your experiencing with your Lupin.

First of all, I doubt that it's normal for that plant to lose it's lower leaves while so small. Over-watering, not enough light, and too much heat are just a few possible causes. Without knowing more about your soil type, lighting, temperature, humidity etc. it would be hard for anyone to offer really good solid suggestions (which may be why you're not getting more answers to your post).

Hope someone who knows more about that plant comes along soon. Meanwhile, make sure you don't over-water the Lupin.

Art

I grow Lupin every year and have not noted the problem you are having. For me there has never been anything difficult with starting Lupin from seeds, my own saved or purchased. For purchased seed I always soak in hot water first, for my own fresh seed this is not necessary. Al

I grew all my plants via winter sowing--set the seed in a recycled milk jug with plenty of moist growers mix, stick in a label, tape the jug shut and set it out in the cold. Seeds will germinate around mid-March; plants will bloom second year. None of my winter sown lupines lost their true leaves after planting out or potting up except when they went dormant for the cold weather.