Coördinately in English (since these are oft-confused words):
to lay - lays - laid - has laid
to lie - lies - lay - has lain
shouldn't the translation be: "He was laying (something) on the bed"? Because "He was lying in the bed" sounds like he was already lying in the bed, so there should be "han la i sengen", because legge - la means that someone or something is lying on the bed. And as far as i remember ligge - lå is an action in action, it means that he was doing an action - laying something or someone on the bed.
You have it backwards. "Å ligge" is "to lie" and "å legge (noe)" is "to lay (something)"