CAVEAT: I have never done this, but you seem so desperate.
The short answer is no. LFS has a
Live CD project, but it's outdated. You could use it for inspiration creating your own.
However you also ask how Ubuntu et. al. create live CDs so easily. I don't know about "easily", but there is a Ubuntu Wiki page that shows how to create a Live CD from scratch. It looks very detailed:
https://help.ubuntu.com/community/Li...ionFromScratch. Might not be up-to-date, and is not directly applicable to LFS, but can be used for inspiration.
Unfortunately one of the ToDos on that page is "Update syslinux/isolinux instructions. With recent versions of syslinux the instructions shown here create a broken menu.". So I guess you have to study syslinux/isolinux first, or perhaps ask that question on that wiki or on ask.ubuntu.com.
Finally, "open source" doesn't mean "step by step instructions". It means that source code is accessible and that you have the right to use it and modify it as much as you like. Documentation is a separate matter.