Literally has been used as an intensifier for over 200 years. The Oxford English Dictionary includes the definition of "figuratively". Jane Austen, F. Scott Fitzgerald, Henry David Thoreau, James Fenimore Cooper, James Joyce, Charles Dickens, and Mark Twain all used it that way in their writing.
I knew I'd receive that reply, and I know it to be true. It's still very odd, as noted. I'm sure there are other examples where one definition contradicts another, but none immediately spring to mind.