I have embedded line feeds in a tab delimited text file in Unix land that I "fix" with an "awk" script.
I just tested some stuff with embedded linefeeds in the Excel world.
First was to save the spreadsheet as a .csv file.
When viewed with notepad, the cell values were quoted -- " " -- and there were square symbols where the embedded linefeeds were supposed to be.
But, when I tried to read it in, with the DSD and TERMSTR options set, it was as your frustration is.
Second experiment read the Excel spreadsheet directly -- first row = column1, column2, column3. It read the data properly. "column1" has a linefeed in the midst of its character string, as does "column3", as they were supposed to be.
Third experiment attempts to translate the embedded linefeed = success. It is in fact a linefeed and not a carriage return, and I successfully translated the '0A'x to an 'L'.