Did you go to Document Settings -> Document Class -> Class Options and under 
Custom enter either “utf8” or “latin1”?

As for the additional options, it looks like you need to pass them to 
\setupThesis{key1=value1,key2=value2} which you should be able to enter into 
the preamble. Otherwise you can enter latex commands within a document by 
entering “Tex Code” under the insert menu. 

I couldn’t get LyX to load the class, and have not played around with custom 
classes in LyX yet. However, creating a barebones latex file I get the same 
error you do if I do not pass the option of “utf” to the rtthesis class.

-- 
Respectfully,

Robert Susmilch
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