LÖVE

I came across this utility called Sprite Lamp on Steam: http://spritelamp.com/

Have any of you guys looked at using it with LÖVE, or do you have any thoughts about whether it would be useful to try to integrate (which it has not been, yet - only Unity and Gamemaker).

-maxx

The light vs shadow engine, or rather, it's successor, may be able to do this already; and it's free in both ways.

Well you can achieve what it does with shader, some understanding of normal mapping, and photoshop/gimp...