So trying to review the wording for adding sites into battle for access has come up somewhat empty. There is nothing about it in the rule books (new and old) or in the new REG, so this might need some clarification. But here is my understanding as a starting point.
Sites can be placed in battle at anytime, but for it to be a battle a hero has to be present. (if this is truly the case, I could just be playing wrong) The Hero's ability would be negated and once Dragon Raid is entered into battle it would negate the LS, but (again my (could be wrong) understanding) is if the ability on a character or enhancement didn't activate once it came into battle, it could not later. So I would be saying that it does not reactivate!