DFAS won't pay VA, VA will. Once VA starts DFAS will only pay the remainder.
DoD retirement and LOS retirement are an either/or scenario.
If you are over 20 (well, independently eligible for LOS retirement, regardless of disability, is more accurate), you can get the VA pay plus the full LOS pay from DFAS through CRDP or you can get the VA pay plus the difference of the disability pay from DFAS, which is some rare scenarios is greater, won't be in yours. Once VA starts in your scenario (unless your children situation makes VA above 3500, don't think it will be) If you are under 20, you will get the VA pay then the difference between the disability pay and the VA pay from DFAS. LOS retirement can play a role in some CRSC scenarios regardless of 20 years.
Lets see if I can break this down in a way that makes sense and is readable. So, in your scenario, this is how I understand the flow:
For clarity, lets pretend VA is gonna pay you 3000.
You will get 4700 until VA starts.
VA claim is complete, they begin paying 3000.
VA notifies DFAS, then they should stop disability pay but start CRDP, this will change you to LOS pay from them, 3500.
So your overall pay should be 6500, two different checks from different agencies and funding.
VA should backpay for the difference you missed. 1800 for each month it took for them to complete.
Honestly, I'm not 100% I got all that right. MAParker or Jason is pretty good about fixing bad math though, so I'm gonna post it anyway.