  This paper and the others in the series challenge the standard model of the
effects of gravitational lensing on observations at large distances. We show
that due to the cumulative effect of lensing, areas corresponding to an
observed solid angle can be quite different than would be estimated from the
corresponding Friedmann-Lema\^{\i}tre model, even when averaged over large
angular scales. This paper concentrates on the specific example of spherically
symmetric but spatially inhomogeneous dust universes, the
Lema\^{\i}tre-Tolman-Bondi models, and shows that radial lensing significantly
distorts the area distance-redshift and density-redshift relations in these
exact solutions compared with the standard ones for Friedmann-Lema\^{\i}tre
models. Thus inhomogeneity may introduce significant errors into distance
estimates based on the standard FL relations, even after all-sky averaging. In
addition a useful new gauge choice is presented for these models, solving the
problem of locating the past null cone exactly.
