I do not have the full details of the busbar feeds for the Classic and NG 737s wrt cabin lights. I know that the 'Jurassic' 737s had half the lights on each busbar, so that a generator or engine failure would put out half the lights. I will try it the next time I can (before departure!) for my benefit. Maybe someone here knows?
It sounds as if what you heard is correct, and maybe either the ceiling or wall lights went off? It would take the crew a minute or two to light the APU and connect it to the 'failed' busbar.
A correction to Rainboe's post - on the NG, the APU can supply electrical loads up to the maximum certified aircarft altitude of 41,000'. The limit of 37,000' is for the 'Classic'. Once again
Chris Brady has the info!
NB For Rainboe - some companies have different limits