If it looks shorted to an ohm meter, the LED is bad. However, because it does not look like a short does not tell you that it is good. Modern ohm meters present a fixed current and measure the voltage. A diode has a forward voltage drop, so it will look like a resistance to the ohm meter (rather than the semiconductor that it really is). Ohm's Law, I=V/R, does not apply to the diode, as the diode is not ohmic.