Found a company, TerraSolid, in our neighborhood which produces programs for processing of this kind of data. Unfortunately their applications cost zillions, so it seems I have to go on with the started project. There is an open source activity at http://liblas.org/ which seems to be very useful. They feature a list of other commercial packages which seem to be based on the os library.
The liblas library is based on work done by Martin Isenburg and Jonathan Shewchuk, who are also authors of a set of command line LAS utilities called LAStools at http://www.cs.unc.edu/~isenburg/lastools/, which seems to achieve much of the essential groundwork for our project.
Martin's utility "lasclip.exe clips away points falling into polygonal shapes (e.g. complex building footprints)." If the LAS file contains projection information, the las2dem.exe will also "be able to create a KML file that geo-references the DEM for display within Google Earth". The two developers also produced an interesting article "Visualizing LIDAR in Google Earth" http://www.cs.unc.edu/~isenburg/googleearth/
[image: rPUJ_P5122C1_detail.png]
For a map view of the same area see: http://tinyurl.com/455gcft