I think it's already been announced to the industry forums (real ones, not online ones) that LCY will be closed on the days of the opening and closing ceremonies of both the main Games and the Paralympics. And the impression that was given was that it was very much undecided what would happen inbetween for security reasons.
Dunsfold now suffers from NIMBY problems though I think? Or actually might have been reverse-NIMBY problems in that they wanted the airfield operational more than building the houses on the southern boundary of it - can't quite remember. Plus the road infrastructure at Dunsfold is pants, whereas North Weald even has its own motorway junction!
But I agree that NW is a great option - it's just a shame they decided that Hatfield and Leavesden were better as industrial complexes else we'd not be having this debate about airport access in the South East already...