Wow, LMP, very thought out and interesting idea. Far more revolutionary than the idea I had in mind for my game. However, I do suppose a few problems might rise to the surface when testing this... The phantom has already pointed out most.
Essentially, your game is not really innocents against wolves anymore, but wizard against wizard. As soon as one of the wizards dies, whether this is because of the cleverness of their enemy, or the stubbornness of the innocent villagers - whom we all know enjoy to kill the gifted ones every now and then - the game is decided. The outcome of the game is entirely dependent on two people. This could be fun, I suppose, but a game is lost when one of the wizards suddenly misses a deadline or makes a minor slip up. Quite a responsibility, and I already lose my nerve when I’m a wolf or seer
Also, what happens when the evil wizard and good wizard both choose the same innocent to turn in one night? This is quite likely to happen - there are always people who catch everyone’s attention.
I suggest also that, should you wish to test this scenario, you make the night phases just a little bit longer than usual. The game looks like it is going to be even more intense and demanding than your average Tol-in-Gaurhoth game, and if one of the two wizards happens to live in a strange time zone, the game will already be decided before it has officially started. This could be prevented by making the night phase 36 or 48 hours even... If the game works out as it should, there would be too many gifted anyway to make this phase even remotely boring.
About the whole Shiriff thing, this could become especially confusing. Robbing a Shiriff of his gift is not so easily done, since there is always someone else involved.
Huhm, yeah, well, maybe you should just test this and see how it works out. ^^
Edit: I always cross post... bad habit.