Hi MouseGuru,
Isometric rendering is really just a special case of 3D rendering with a fixed camera angle and with perspective disabled. On that basis, you can certainly use 3D terrain in an isometric renderer if it supports heightfields.
This image from the World Creator website clearly shows it rendering a 3D heightfield.
Now, I've not used World Creator, so I can't say how easy or otherwise it is to import terrain from L3DT. Their website seems to suggest it can load greysale heightmaps in bitmap or PBG formats, both of which can be exported from L3DT. Please let me know how it goes.
Best regards,
Aaron.