I think there was a part in the story where where Lisey enters that world and there are people sitting on benches or something with those leather masks.... I could be wrong... It's been years since I read that book... Maybe it was Rose Madder.I don't remember leatherheads being in Lisey's Story. Time for a re-read methinks.
From their description in UTD I've always felt The Leatherheads werenothing more than "aliens", and the alien children were simply playing with the Dome for entertainment to watch these creatures (humans) that were alien to them suffer.