RE: How much dihedral in an LT40?
When I built mine I used 1/2 the dihedral called for. My Father-in-law used the normal dihedral. I couldn't tell that much difference in the way they flew. If you are aware that you'll lose some self correcting / leveling capacity I would talk to your instructor, if he agrees I'd build the wing flat.
Just my 2 cents.
John