Lots of issues here. My colleague has been working on this approach and it's made for a pretty lousy week for him. He might be able to provide more details, but to start:

• Using tar with a raw device makes no sense
• Docs should note that the lvm block-level dumps don't allow for incrementals
• Wouldn't it make more sense to take a snapshot, mount it, and tar the files instead of doing the block-level dump/restore?