What is the folder LOST.DIR and can I safely delete it from sd?
It is a storage area for files that were "recovered" during the Android OS startup fsck (File System ChecK, I believe, not what you were thinking...) which is sorta like the old DOS chkdsk program. Files that are found to be messed up, like from maybe pulling your SD card while it was being written to, are stored with random names into LOST.DIR, where they just sit forever, generally. You could do some recovery work on them, if you knew exactly what you were looking for and needed something back desperately.
Its OK to delete the files, if any, in that directory, but if you delete the directory the mount process will just recreate it on boot-up during the new fsck. If you have files in there, it indicates that something was found to be wrong with your file system on that drive at some point.
They all show up as .exe (executable) files. Could your theory still make sense? Droid Bionic, Stock, Rooted.
You can safely delete them. They are junk files that are found on storage that were probably temp files at some point when an app crashed without closing the files properly.
The LOST.DIR directory is analogous to the recycle bin found in Windows OS somewhat. Its a place where the Android OS places files that were recovered during a system boot up (ie when you turn on your phone). All you need to know here - All You Need To Know About LOST.DIR
Separate names with a comma.