Is this due to the fact that the new models have 1 or 2 lods instead of 3 as in the original game?
Your first guess is probably correct.
short of redoing the models in 3 lods( which nobody would wnat to do) is there another solution
Ideal solution would be to re-do the models with 3 LODs. There is a way, as shown in the Barn tutorial
Unfortunately Blender's .x export plugin is, shall I say, unsatisfactory.