John:
You are part way there, but not quite all the way. The exhaust circuit of the LS valve (as well as most other valves that are not power beyond) is exposed to downstream pressure even when the LS spool is in neutral. Therefore, even if the LS spool is in neutral when you lift the TPH, the buildup in pressure in the supply line from the TPH, through the LS valve, through the FEL valve, and back to the pump is "seen" in the exhaust galleries of the LS valve. And the relatively fragile o-rings around the ends of the spool that seal the exhaust galleries from the outside of the LS valve can't tolerate more that a few hundred pounds of pressure (at most).
A power beyond valve, like your FEL valve, separates the exhaust galleries from any fluid under pressure (other than the very low pressure needed to get exhaust fluid back to the tank). Therefore, your FEL valve can be upstream of the TPH valve because the backpressure from the TPH stays in the power beyond circuit in the FEL (which does not communicate with the exhaust galleries in the FEL valve).
But the LS valve is not power beyond, so it cannot have any restriction on flow (like the TPH) from the out port back to the tank.
Greg will connect his LS valve to the work ports of the FEL curl/dump spool. That way, his LS valve will carry fluid only when the curl/dump spool is shifted and, unless the TPH is raised at the same time, the return fluid from the LS valve (whether its spool is shifted or not) will have a direct, unrestricted path back to tank through the workport, into the FEL, and then out the FEL exhaust outlet to tank. When Greg wants to raise his TPH he will center the curl/dump spool, which takes the LS valve out of the circuit entirely, so that the LS valve will not "see" the pressure rise in the FEL valve caused by the operation of the TPH.
In your case, if the LS valve is in the power beyond circuit of the FEL valve, fluid will flow through it all the time, and raising the TPH will restrict that fluid's path back to tank, raising the pressure in the exhaust galleries.
If that's confusing, shoot me a question and I will try to clear it up when I check back in a couple of days.