Good points, Ray. I've not read HoME X as yet, else I may have spotted that.
I'll add a little to the theory about The Valar. They do fade, but it seemed to me that Melkor faded faster. He lost his powers pretty quickly, didn't he? All the while, the Valar did not fade as much and not so quickly.
Okay, so Melkor loved the light to begin with (and probably retained some of this love in his theft of the Slimarills [among his other motives]), but what turned his heart to the darkness? Perhaps shame? The principle of 'men hate the light for it reveals their misdeeds'* It occurs to me, then, that maybe Melkor suspected deep down, that what he was doing was wrong. Perhaps he had convinced himself that he was right but still something niggled at the back of his mind. Some remnant of a conscience, perhaps?
I don't know. We'd need a psychologist, and I'm not one.
*I'm not sure if that's the correct phrase, but you see my point?