First create your object in high resolution so you have an idea of what your low rez should look like, for this example we will use a sphere and the default textures.
next create your low resolution model for this we will also use a sphere, just a really, really low poly sphere...
make sure the low rez model is not larger than the high rez, make it as you would a shadow mesh.
next, rename your low rez model whatever your high rez model is but with a _lowrez after it. for this we use sphere_lowrez, then hide the object as you would a shadow mesh.
export and play your map...
the sphere looks like this at far range (I set my LOD distance to 12 for a better photo)
and at close range
