You probably won't be able to get a LM-2 in there, even if you took off the casing. Those are very small models with very limited space inside. People that have added DCC to them use Z-scale decoders. I've seen some with lights, but that would be a miserable thing to try and add. I think you're plan of having the Trackmobile section in DCC with a buffer track is probably the best route to go. Not ideal, but I don't think there is a way around it at this point. Once Ring makes Railpro for N-scale then you will probably be in business.
-Kevin