does anyone know a way to simulate light leakage and other mechanical failures of a film camera using DV footage in Final Cut Pro?
any help is appreciated!

The best way is to find some stock footage of real film defects and composite it over your video. I know Artbeats has some great ones, but they cost $$.

You could manually place white flash frames 1-4 in length and either have them cut in/out or use bands to fade them in/out. I think fading would look more realistic. Or, you could keyframe a luminance filter to cut or fade in and out to blow it out at the highest value points.