I believe the jury has rendered it's verdict. There is a bug or omission in the LCS code, take your choice what you want to call it.
If you have a switch that you want to indicate the "thru" route is the curved exit and the "out" route is the straight exit, you can change the switch sense on DZ-2500 by a simple configuration option with the switch button. Switch to green on the indicator, hold the button down for four seconds, and the switch will change to the "out" route and swap the sense of the LED's and the switch commands. To change it back, do the same operation again. Job done, right? When you use the remote or the manual switch button, everything works exactly as you'd expect, select the "thru" route on the remote, and it switched correctly to the reassigned "out" path as you intended, and the green indicator on the switch (and keypad if connected) are illuminated. Ditto for the "out" path that is not the straight exit from the switch, you use the "out" button on the remote or keypad and the switch red LED lights as you'd expect.
Sadly, when you do that, there is no way to make it work properly with the current version of the LCS application. The LCS program simply does not recognize the ability to change the sense of the switch, even though the DZ-2500 and CSM2 hardware would have no problem with it. There would have to be an option to swap the paths in the LCS application to make this work properly, and there is none.
When the switches are configured this way, you can get everything to iPad display properly if you switch them manually with the switch button, or with the TMCC remote. Makes you think it must be possible, right? However, if you use the iPad to switch them, it will change the switch position and color on the screen, but not move the switch. Touch it again, and it will then move the switch and match up the screen with the switch. So, basically, you have to touch the switch twice, ignore the incorrect operation the first time, and do it again to get the correct switch position. I'm sure this is because the LCS program on the iPad sends what it thinks is a "thru" or "out" command to the switch since there's no way to tell it to reverse them.
Right now the only way I see to "fix" this is to physically rip apart the DZ-2500 switches, swap the LED's, and then turn off the option to swap the routes. This is less than desirable as then to get the "thru" route on those switches, you have to select the "out" route. I am bummed that I spent a ton of money on the DZ-2500 compatible products from Lionel, only to find out they don't solve the problems! I have 30 CSM2 Breakout Boards and four CSM2 boxes, and there's no way to configure them properly for operation with a standard DZ-2500 configuration! I'm not sure what the sense is to have all these Z-Stuff specific products build specifically for the Z-2500 but you can't really use them with anything but a very basic layout scheme.
@Dave Olson, any chance there'll be an update to the LCS program sometime in the near future?