It seems to me you are not actually reading any data. The controller will output the data to be read only while the 'E' line is active.
Try this:

U8 LcdDataRead ()
{
U8 tempRead;         /* Temporary var to hold the data read from the LCD */

LCD_DATA = 0xFF;     /* set LCD_DATA port in input mode */
LCD_DI = 1;          /* Data mode */
LCD_RW = 1;          /* Read mode */
LCD_E = 0;           /* strobe */
LcdDelay(1);
tempRead = LCD_DATA; /* Read the data here */
LCD_E = 1;
LcdDelay(1);
return tempRead;     /* return the data read */
}

Regards,
Rob.