I had the same problem a few days ago, and since this question is very high placed in Googles search results, I would like to contribute a solution. You can luckily do this with Virtualdub if you are going to add a plugin package called FFInputDriver. Please look at my detailed answer here: https://softwarerecs.stackexchange.com/a/14513
It will allow you to import a lot more files than just avi, I have successfully rendered mp4 and flv files into Lagarith avi files with this! To any visitors visiting this page by Google: This is very probably your answer if you want to encode videos into the Lagarith codec! You can even change the file container afterwards (for example to mkv) with FFmpeg. Take a look here.