I had not heard of the Lycurgus Cup before, but I am definitely going to go find it in the British Museum when I next travel up to London. That it would be something the Dwarves could have discovered and manufactured for sale to light-loving elves is such a great idea. 

I agree that Dwarves would enjoy making such a thing and Elves would happily buy it!

And your conclusion, suggesting how the glass would look set in the window, greatly appealed to me.

How interesting! Definitely a Dwarvish thing! I'm sure they'd also figure out how different metals would create differing hues as well.  And Elves for sure would love it. Caranthir's fortress at Mt Rerir would be renowned for the windows!

Nice. Now I'm imagining Dwarves as the makers of all frit in Beleriand, and Noldorin glassmakers going nuts when they discover all the options. (And getting a little crazy when they can't quite figure out how to properly use some of them...just because the Dwarves would sell them the frit doesn't mean they explained how to use it to full effect.)