Can you design and load your own lv2 in to the dwarf ?
Yes, we do it all the time.
Creating Audio Plugins - MOD Wiki has some information, but still work-in-progress.
SSH port is open, so you can manually place the plugin files in there if you so wish.
But more typically you use the a webserver URL to push bundles into the device.
Publishing Plugins - MOD Wiki has details on that