I recall there was a command-line LGP unpacker/packer (Highwind, created by Aali, if I remember correctly) and also a command-line LZS decompressor/compressor made by Qhimm ages ago. I'd suggest you using those. As for decoding tha background data, I must warn you I used that format desription long ago (I think it hasn't changed, but I could be wrong) and I didn't get too far. The resulting images had several artifacts and for some of them I couldn't even get anything recognizable. Palmer must use some way more complete format description. Maybe Aali decoded it himself? I wouldn't be surprised.
Anyway, whish you a lot of luck, because I think this could be quiet useful. I thought about doing something like this long ago. But so many things got in my way I never even started