I would think you could use a Heightfield From Shader to handle this by connecting it further down in the terrain list, but it doesn't seem to be working. My assumption may not be correct and there are a number of reasons it might not be working. The alternative is to export separately and use a 3rd party tool to blend them, or use the LWO "micro exporter" which can export virtually anything into LWO but is more difficult to work with. You'd probably do it with a camera in a top-down view and it would be hard to get the precise area or detail you want, but it's possible.
Use of the LWO micro-exporter is a bit tricky. The short version is you create one, specify the output file name, specify it in the Sequence/Output tab of your renderer, then specify the camera which the exporter is tied to. When you render an LWO will be saved. Detail (geometry density) will depend on the detail you use to render. You can turn off stuff like atmospherics as they won't be exported and will just slow down the render. The geometry will be visibility culled so for example if you use a regular camera position you would not get geometry for mountains that are behind others in your view. The best result for a heightfield (without overhangs) would thus be obtained from a top-down perspective.
- Oshyan