Sorry, I meant WED, MED doesn´t make sense :P
It should be possible to place models as entities in WED, which then should be able to throw a dynamic shadow if set their shadow flag. As an addition, you should play around with the shadow_stencil var in your script.

perhaps that is why. I have no script yet.

Now that I know how to make model objects that cast shadows, I am going to town on this level. Thank you for pointing me in the right direction!