Double photoionization (DPI) and ionization-excitation (IE) of Li(2s) and Li(2p), state-prepared and aligned in a magneto-optical trap, were explored in a reaction microscope at the free-electron laser in Hamburg (FLASH). From 6 to 12 eV above threshold (homega = 85, 91 eV), total as well as differential DPI cross sections were observed to critically depend on the initial state and, in particular, on the alignment of the 2p orbital with respect to the VUV-light polarization, whereas no effect is seen for IE. The alignment sensitivity is traced back to dynamical electron correlation at threshold.