you are wrong.
many modders already made 6 lods for their own ship: they can be converted and modelview will show them, but according to kazan FSO use only the first 4.
Also, it seem stupid to me to use something more than a borg cube when your ship use not more than 5 or 6 pixels on your monitor, as well as using 256x256 textures on it.
Low poly lods are there for a reason.....
And if you see lods switching then there is something wrong, and what is wrong is not in the lod system but in the artist/table editor who made a too crappy lod1 or setted a wrong lod distance in the tables.
Again, just give to the modders 2 additional lods, the modders will be free to decide if they want to use those 2 additional lods, maybe just using higher res textures, or if they don't want to bother making more job. They will decide if they want to make ultra high detail models for very close distances with cockpits or a picard's head in a window of an enterprise bridge, and regular models to be used at action-distance.
Maybe make the effects (glow and spec) distance related and not lod related, if possible. Elseway, apply the effects to the first 1-3 lods, and use the detail settings to decide if to apply them just to lod 0 or up to lod3.
Also, use the settings to modify the lod distances of the tables, adapting them to the different needs, maybe not showing lod0-1 on outdated systems.
that's it