I know lots of pilots with elevated cholesterol, including my current boss. The lipid-reducing agents are almost all approved by the FAA ... I specifically know that Mevacor, Pravachol, and Zocor are OK. The newest and best cholesterol medication, Crestor, is not yet FAA-approved but probably will be in August or September. The lipid medications have been found not to offer aviation-adverse side effects. Crestor hasn't been approved only because the FAA has a policy of not approving a medication until it has been on the market for a year. Crestor came out last August, so it should be approved this summer.
The FAA does not do blood work as part of any medical class. A company physical (like Doug's at Delta or the new-hire "astronaut medical" at Eagle) may do so. A friend of mine who went through the Eagle process said they sent him the results of his blood work a few days after the exam. Apparently they didn't find anything too bad because he starts there next week.