variable scope in classes

class LCDUPDATE{
  public:
    LCDUPDATE(int status1, int status2, int status3, int status4, int hstatus, int mstatus, int bstatus)

LCDUPDATE is a constructor because it is named LCDUPDATE and it returns nothing

calling a constructor in loop is nonsense, particularly because it is destroyed immediately when loop() ends.

Plus, you are calling lcd.this() and lcd.that() inside the constructor, which has a scope issue.

try like this:

header:

#ifndef LCD_h
#define LCD_h
#include <LiquidCrystal.h>

int status1;     // LCD STATUS DISPLAYS  1 = BOOTING 2 = READY 3 = INDEXING 4 = FAILURE 5 = PASS
int status2;
int status3;
int status4;
int status1old;
int status2old;
int status3old;
int status4old;
int hstatus;    // header
int mstatus;    // Middle status        1= Startup 2=Ready 3=Waiting for STN 4 index stg 1
int bstatus;    // Bottom status
int hstatusold;
int mstatusold;
int bstatusold;
int feedback;       // lcd feedback print
int feedbackold;

class MyLcdClass{
  public:
    myLcdClass(){}; // c'tor
    void begin(){
      lcd = new LiquidCrystal(12, 11, 5, 4, 3, 2);
      lcd->begin(20,4);
    };
    update(int status1, int status2, int status3, int status4, int hstatus, int mstatus, int bstatus)
    {
      if (hstatus != hstatusold) 
      {
        if (hstatus == 1) 
        {
          lcd->setCursor(0, 0);
          lcd->print("                    ");
          lcd->setCursor(0, 0);
          lcd->print("   Boot Complete    ");
        }
        hstatusold = hstatus;
        delay(100);
        lcd->setCursor(2, 2);
        lcd->print(hstatus);
        lcd->setCursor(3, 3);
        lcd->print(hstatusold);
      }
    }
   private:
     LiquidCrystal* lcd;
};

#endif

and .ino

//include required libraries
#include <SoftwareSerial.h>
#include <LiquidCrystal.h>
#include <Stepper.h>
#include "LCDU.h"

//===CONSTANTS and variables (buttons and pins)
const int buttonPin = 9;    // start button
const int estopbutton = 8;  //estop button
const int indexswitch = 7;  //table index switch
const int indexmotor = 6;   //table stepper motor
const int indexdir = 10;    //table stepper direction pin
//===== LED PINS
const int stn1good = 50;         //50
const int stn1bad = 52;          //52
const int stn2good = 46;         //46
const int stn2bad = 48;          //48
//===== STEPPER PINS
const int stepsPerRevolution = 200;
Stepper myStepper(stepsPerRevolution, 42, 40, 38, 36);
int stepspeed = 10;
//ALSO SEE myStepper.setSpeed(100);
//==== LCD Variable

int LCDtest = 0;
int printtest;

MyLcdClass myObject;

void setup()
{   
  myObject.begin();
}


void loop()
{
   myObject.update(1, 1, 1, 1, 1, 1, 1);
   delay(1000);
}

compiles but not tested...