I have seen lateral femoral nerve entrapment a few times actually, though never in lifters and never from weight lifting belts. That said, it's definitely possible as one of the independent risk factors for the condition is "tight garments or braces around the abdomen or waist".
As far as what to do about it, I think trying a 10mm and/or 3" belt may be good options- though I don't think there's much risk for any serious sequelae coming from this condition besides the discomfort you've already experienced/that recurs.