I've attempted something similar for a city of 20,000 before using an overlay mod but map projection issues between the DEM and images along with city simulation scaling just yielded a stretched blob with 95% industrial traffic and a queue entering the city that never ended. I will check their tuning parameters and see how they handled it. It was fun to build regardless.
I've been waiting to try with CS:2 using aerial photo and lidar data of Vancouver that I've collected myself. Mod support is still weak compared to CS:1 but I'm hopeful that it's possible. I'd like to release a DEM, DEM+roads, and then the fully built version as three separate maps.