Okay, this isn't perfect but it works.
1. Download the RAW file for your island and open it as 256x256 and 13 channels.
2. Select and copy the grayscale image.
3. Open Bryce, create a terrain, and click on the E button to enter the Terrain Editor.
4. Paste the image into the Terrain Canvas using Cmd/Ctrl+V.
5. Use the 3D Preview window to examine the terrain comparing height to the grayscale values.
6. Modify the terrain or create a new one. Use what you learned viewing the original terrain to set grayscale values. I'd suggest keeping the terrain fairly low in Bryce as it will be much larger in SL.
7. In Bryce 5.5 or lower, use Cmd/Ctrl+C to copy the terrain grayscale. In Bryce 6, copy the terrain grayscale or save the terrain image by clicking on the arrow above the Terrain Canvas and choosing Export image from the menu. Save as PNG or TIFF format.
8. In Photoshop, paste the image into the RAW file (if you saved the image, open it, then select, copy, and paste into the RAW file).
9. Hide the original layer. Check channels 2 & 3 to ensure they are the right height for the height multiply factor and water level.
10. Save the RAW file and upload it via the World > Region/Estate > Terrain dialog.
11. Once it uploads, check the height of the terrain and water. Adjust the RAW file as needed either in Photoshop or in Bryce and reupload.
P.S. I've started a Bryce group in SL if anyone is interested in joining it.