We met an attorney who said a pension plan can be written such that
a person who would get a pension from the plan based on disability could receive the lump sum OR the monthly pension as tax free?
Has anyone heard this?

How are the benefits funded? If the employer is funding the benefits, disability payments are taxable. Also, I am skeptical about any claim about a lump sum disability benefit. There is a lot more to say on the subject, but you probably don't have to dig too deep to get a negative answer.

One question, is this being discussed for a new plan that hasn't been written yet or is this for an existing plan where someone's dreaming they can have their cake and eat it too?

A few more specifics might be of use, although I too am skeptical.

While gazing lovingly at Kay
Edith came into view
and I found to my dismay
you can't have your Kay and Edith Too

If it sounds too good to be true, it is. If is caught the plan sponsor, not the attorney, in on the hook. Just as the attorney happily received payment for getting you into the mess, he accept an evern higher payment from you to try and get you out of the mess he created.

Get a second, third, IRS opinion ...................

Disability pensions can sometimes be excluded from gross income under IRC Section 104(a)(1). Yesterday the U.S. Tax Court decided the most recent case under Section 104(a)(1). You can get that case here http://www.ustaxcourt.gov/InOpHistoric/Tateosian.TCM.WPD.pdf