So Babylon JS currently does not have very robust terrain options especially with LOD considerations. After a little bit of side development I was able to have a decent algorithm be implemented. It was inspired by chunked quad-tree LOD system, but is slightly modified. I also used my Das_Noise library for the noise generation and will eventually make this system more robust and faster. I have not calculated to normals yet in a fashion that prevents lines between zones/leafs, but that should not be too hard to fix with a little time and focus. You can see the development thread here:
I also was working on a planetary version, but that I will post on later as its a little different then this algorithm.
http://www.babylonjs-playground.com/#f00M0U#39 for a good example of the LOD.
I will be finishing this up at some point optimizing the script and making fixes to get rid of the seam popping and the normal lines.