The KX165(A) cauculates the CDI position in the radio box, the radial selected on the OBS is sent to the KX165 via syncro lines.
Without the drawings in front of me I cant be sure but I think if you fitted a second indicator with a LOC converter and powered it from the VOR/LOC composite line it might work.
The reason all the calculation happens inside the KX165 (A) is that it is intended for use with a HSI and HSI 's do not usualy have room for a LOC converter inside the box.
IO540
I'm airframe & engine !