I don't believe such a thing exists. In fact, I don't see any clients for reading LJ, only for posting -- am I wrong?
I'm considering writing a Firefox plugin. You'd choose "open friends list" from a menu item, and it would open a new tab/window and display your friends list formatted in frames like bloglines does. Items would be able to be "kept new" (which I believe means I wouldn't be able to use greasemonkey, because I'd have to go make requests directly to LJ, not just reformat the existing presentation of the friendlist).
Am I off track at all? Any suggestions?