As a general point, when starting out with relativity I'd advise you to forget about length contraction and time dilation. They are special cases of the more general Lorentz transforms, and it's very easy to try to understand things in terms of them when it is inappropriate to do so. The general recipe for relativity problems is to write down the coordinates of one or more events in one frame, then transform to the other frame. Then try to understand the other frame's description.
So, for the sake of argument, suppose we emit two light pulses in opposite directions from ##x=0## at time ##t=0## and they hit targets, stationary in the lab frame, one light second away one second later. We have three events of interest - ##(x,t)=(0,0)##, ##(1,1)## and ##(-1,1)##. What does this look like in a frame moving at speed ##v## in the ##+x## direction? Plug the coordinates into the Lorentz transforms$$\begin{eqnarray*}
x'&=&\gamma(x-vt)\\
t'&=&\gamma\left(t-\frac{v}{c^2}x\right)\\
\gamma&=&\frac{1}{\sqrt{1-v^2/c^2}}
\end{eqnarray*}$$and you will find that the coordinates in this frame are ##(x',t')=(0,0)##, ##(\gamma(1-\beta),\gamma(1-\beta))##, and ##(\gamma(1+\beta),-\gamma(1+\beta))## where ##\beta=v/c##, and ##c=1## in these units.
Notice that both light pulses must have travelled at ##c## for the distance travelled (##\gamma(1\pm\beta)##) to equal the time taken in these ##c=1## units. But note that the two light pulses didn't move the same distance as each other (because the targets are moving in the ##-x## direction in this frame) and didn't take the same time as each other - this is the relativity of simultaneity at work.