Sounds like a good idea, rCraptor style squares might be an idea. I would like to see, it would be a little bit of a nice touch, the national flags used for starting as well (yes, national flags are used for starting, read the ISC or the blue book).
GPL and GP2 both had 2D marshals years ago, and they still do the job for me. GP4 had 3D marshals, great idea just shame they always ran retardidly right to the side of the track to wave their flags, GP4 also nicely dealt with the clearing cars issue.
It's called rFactor, there may be some elements that are rather crap, but frankly so are the current flags in LFS, why do you have to keep fueling the fire, if LFSers stop making silly remarks then maybe we'll be a bit less isolated.
Very very few races are started with a flag today and it's mostly done for the novelty value. TBH I think lights are better for large grids in a racing simulator because they're easier to see, less to model, and a better representation of RL.
Becky's LFS Companion could do this (I don't think it works with Patch X though). It would tell you when a car ahead/behind was racing for a place or if it was a lap down, and it would tell you if there was a yellow flag ("Yellow flag in Sector 1"). It was just like having your crew chief talking in your ear.
I'd like to see something like that built in to LFS, maybe with text at the top of the screen as well if you don't have speakers plugged in or it's on mute for whatever reason ...