I had the same problem. It seems that this isn't possible with LXDM (yet - a feature request has been submitted so it may be possible in the future).
The workaround I employed was to install GDM as the login manager, which does accept responses from PAM (e.g. prompt for a new password when the current one has expired).
You can install GDM by type the following at a command prompt (LXTerminal):
sudo apt-get install gdm
This should give you a blue config screen. If you get any errors you may first need to run
sudo apt-get update
You will then be prompted to choose your default display manager - select GDM. If you change your mind you can always go back and update this settings by typing
sudo dpkg-reconfigure gdm
Reboot, and GDM will now be your display manager.
By default GDM gives a list of all the users on the system. I preferred to just have a text box rather than a list, which can be achieved with the command
sudo -u gdm gconftool-2 --type bool --set /apps/gdm/simple-greeter/disable_user_list 'true'
which just gives a 'Log In' button, and then a username box (similar to LXDM).
Hope this helps,