The LCD and Keypad libraries both support mulitiplexing. You simply share any (or all) of the LCD data pins with the keypad row pins and there's no need for additional hardware. I've had this working many times. I'm not sure about the LCD control pins. You'll have to check the library to find out, or you can just try it.
There's no reason most libraries couldn't support some muxing. All the library has to do is reset its (muxable) pins each time before use, instead of just once in setup(). Then just tell the sketch authors which pins they can share.