Terragen works pretty well for OBJ terrains and heightmaps. It's textures that are the issue. For example, can't export lateral textures vs normal when you're doing an ortho.
And old games did use a type of LOD for card-based projections of stuff, but that's pretty antiquated and rarer to see. But usually LOD is just level of detail, swapping objects for higher detail based on Z. And that's just a matter of loading the asset, fading out the current one, fading in the new, and unloading the other (if it's a sparse object, if it's recurring best to keep it loaded so it can swap in and out).