Lots going on -- and lots going through my mind. . .hmmmmmm
OK -- I'm willing to concede that the combination of Evil Elves
and Rings of Power is perhaps too much here; I cannot agree with Durelin enough on the point that we should strive as much as possible to move
away from battle and toward more character development.
That having been said, and in an effort to simplify, how about doing away with the Dwarven Rings (one day, when I can be an owner of my own thread, look for their return

), but I think that there is lots of interesting stuff to be done with the 'possessed Elves' suggested by Pio.
For a new scenario suggestion: the 'scouting party' is transformed into an envoy from Lorien to Mirkwood. This party is composed of men and women (cause I really want to play a young she-Elf, not sure why. . .). They have been sent by Galadriel to ask Thranduil for help in repulsing the orc armies. They find the patrols have been slaughtered, but some Elves have apparently survived and fled toward Dol Guldur. They follow and find that the 'survivors' have been taken over by the houseless. . . and we evolve the story from there. . .