  Comprised of ferromagnetic edge-sharing CuO$_2$ chains that order in
antialigned fashion at T$_N$=9 K, Li$_2$CuO$_2$ is found from local spin
density calculations to display several surprising characteristics: (1) the
ordered moment/f.u. of 0.92 $\mu_B$ is the largest for any low dimensional
cuprate system, in agreement with experiment, (2) 40% of this moment lies on
the neighboring O ions, making it the largest oxygen moment yet reported, and
(3) the second neighbors couplings are larger than nearest neighbors couplings.
All of these phenomena arise naturally due to a well defined effective $d_{yz}$
type orbital that includes very strong O $p_{\sigma}$ character. We interpret
the large moment as surviving reduction by quantum fluctuations due to
extension caused by the $d-p$ hybridization.
