I personally learned a lot from the ‘Game programming patterns and best experiences’ book (by John P. Doran).

… i see it also covers neighbor search.

But that's just about quadtrees, not about dynamic LOD terrain.

There was some recent work on this using binary trees. Maybe worth a look, should be easy to find by googling this:

Experimenting with Concurrent Binary Trees for Large Scale Terrain Rendering
Thomas…

rofellos said:
it may have some blockages (walls or others) between some squares

Assign half the edges of a square to it, eg the upper and right edge. Add two booleans (blocked/unblocked for both edges) or two enum-values (unblocked/wall/bush/etc) to a square and you're done.

The only “problem” you ha…

I would try the PDX forums. Modders and devs discuss on there - but it may of course be a closed feature.