This 
should be the easiest way:
note - with this utility you should get detailed highcolor image with good borders (works with already cropped theater data)
(previous mentioned 3DEM export is difficult - you must find GPS borders and crop exported data)
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LxNormalFix
------------
LxNormalFix is a multi-purpose utility.
  - Fixes the shading normals in the Theater.Lx files, giving realistic terrain shading.
  - (Optional) Changes the selected terrain LOD level file (Terrain.L?) elevation to those in a 
		greyscale BMP or MultiGen DED format file. Recalculates the normals for the new elevations.
  - (Optional) Replace terrdata\Terrain\Theater.Lx elevations using another Theater.Lx file.
  - (Optional) Generate an Elevation Data File (compressed ~= 8 MB) from hirez Theater.L0 file.
  - (Optional) Use Elevation Data File to update elevation in all Level files (L0 - L5).
  - (Optional) Save Theater.L0 elevations to a L0 Elevations Data File. (Quick save).   
//==========================================
// Commandline Context
//---------------------
// No commandline parameters: Calculate normals for all terrain LOD files (Terrain.Lx).
//
// format:  $LP @[Theater Name] @[theater path]  Lead Pursuit F4-AF version
//
// format:  @[Theater Name] @[theater path]	 for ODS512, @Operation @C:\Falcon4\DesertStormTheaterAddon\terrdata
//                                           e.g., @Balkans @C:\Falcon4\terrdata\Balkans
//
// format:  ~Save ~ <">[path\Savefilename]<"> ({path} File name to save L0 elevations.  
//						If no path, file in current folder)
//
// format:  ~Replace=x ~ <">[path\Lxfilename]<"> ({path} File name with Lx elevations.  Same file format as
//						Theater.Lx. Use .Lx extension for source file.  .Ox file 
//						with same name must be present
//						If no path, files in current folder)
//
// format:  ~Update ~ <">[path\Savefilename]<"> ({path} File name of save L0 Elevations Data File.  
//					Use Theater.L0 saved data as base for calculating all levels (0 - 5) (use for installer)
//
// format:  ~Elev=<->[LOD level (0-5)] [minElev - not below(meters)] [maxElev - for map(meters)]
//					 [SW latitude (dec.deg.)] [SW longitude (dec.deg.)]
//					 ~ <">[path\DEDfilename]<"> 	(MultiGen DED file or BMP)
//
// format:  ~
ElevSave=<->[LOD level (0-5)] [minElev - not below(meters)] [maxElev - for map(meters)]
//						 [SW latitude (dec.deg.)] [SW longitude (dec.deg.)]
//						 ~ <">[path\DEDfilename]<"> 	(MultiGen DED file or BMP)
//						 ~ <">[path\Savefilename]<"> ({path} File name to save L0 elevations.  
//						 If no path, file in current folder)
//==========================================
Example:
Shortcut Target box:  
"C:\F4Utilities\LxNormalFix.exe" ~Elev= 0 200 2656 33.84375 123.0 ~I:\Temp\korea-Falcon.bmp
1st parameter = The 6 terrain LOD files (x = 0 - 5,  Terrain.Lx).
                            If LOD level is negative, then the levels from L0 to Lx will be processed.
2nd parameter = Elevations (feet) less than this value are not changed.
3nd parameter = The theater's maximum elevation (feet).
4th parameter = The theater's lower-left latitude (dec. deg.).
5th parameter = The theater's lower-left longitude (dec. deg.).
======
"C:\F4Utilities\LxNormalFix.exe" ~Elev= 0 200 2656 33.84375 123.0 ~I:\Temp\korea-Falcon.bmp	~HirezElev.dat
Same as above.
6th parameter = Save L0 elevations to this Elevation DataFile File.
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I have tried various syntaxes and parameters in the past (about 100x in last 2 years), but without effect.
I hope you are better in command line...(please send the result here - I am very interested in it!)
GOOD LUCK
Luk
P.S. Perhaps I am just quite stupid and can not understand to manual. Dont know which symbol have to substitute or delete.... 
@-( <)>][~$ 
??