Sure, you could make a "fanamorphic" (hah, I love that word!) version of the letterboxed video simply by cropping and resizing it in AviSynth, but that's exactly what it's going to look like -- a cropped and resized version of the letterboxed video. I'm guessing that using AviSynth's Lanczos4 filter to resize the video will yield better quality than using the "Zoom" function of a DVD player on a widescreen TV, though.

I must admit I know nothing about laser discs. Is it a digital format?