It is possible. In some cases it is already partially done by the studio; there are unused [converted] LoG1 assets in the LoG2 asset pack & game. None of the sound files; those were licensed.
Material textures that use 'normal map' images will need those images converted to work in LoG2.
viewtopic.php?p=103867
The animation format is changed. There is a Blender [v2.72!] plugin that allows asset import/export of game models & animations.
viewtopic.php?f=22&t=8086
viewtopic.php?t=14226
** Petri has asked that no one actually build LoG1's campaign as an LoG2 mod.