There's nothing wrong with that approach; I've done the same thing myself with heavy processing scripts.
The only thing to watch out for is that colourspace conversions are not lossless. Although it's only a theoretical loss and not something I've ever noticed in practice, it's probably still a good idea to avoid unnecessary colourspace conversions. What this means is that if the output from your script is YV12, make sure that lagarith is configured to use YV12 format. Huffyuv can only compress YUY2 or RGB.
BTW I finally managed to download your sample. There is some faint ghosting visible on the cartoon segments, but I suspect (without actually seeing the source) that's probably the best you can do with it.
It looks very good. I'll have to dig out the Cyber-EFX version I downloaded and make some comparisons.