I used to build terrain with big polygons (non collide and non drive) and raise the last ones (or more before to have nice shapes), fill the "mountain" terrain with any light texture (could be even one color 16x16 pix) and then mix everything with background image to 100%. Or you can draw a distant track below the eye line, switch it of completely (even from rendering) and build high terrain from there. In this case you don't have to count which polygons should be higher or lower. I don't know about making objects still. I hope this helps
I think I can use your idea as my track is basically on a flat island with the main terrain being in a semi-circle at a good distance from the track. So I already have the underlying Google Earth image in BTB as a "map". My question then to your suggestion would be- how do I best create terrain out from the track as the terrain base in the distance is a good 1.5 to 3.5 miles away? If I fill terrain in from the track to to mountains isn't that going to kill my frame rate?
PM me and perhaps we can work out a solution together.