Thanks for testing the download and my fix package. That lb2cfg.exe program is from the LB2 Display Driver Update (DDU) patch which allows you to choose between Software, Direct3D and 3DFX display modes. This was even in the pre-release demo so it's weird it never made it into the full game until a patch was released!
Are you using Windows 7? You running in 3DFX mode with dgVoodoo glide wrapper? To fix the cockpit, you can change the Renderer API setting in the dgVoodoo settings file to Direct3D9 - BUT, you will get a crash after each and every mission and won't be able to progress through a campaign or earn rank, etc. I guess that setting is currently on Direct3D7? If so, this is when you get that broken 2D cockpit view. You could always try Direct3D mode. It's not as nice-looking as emulated Glide but it would at least offer hardware-accelerated graphics. Select the 'Not sure' option in the lb2cfg.exe for which graphics card you have, under D3D. The only option after that is, yeah, Software mode.