[Raynor]

I also remembered that Ulmo states in Unfinished Tales:

Originally Posted by Part One: The First Age - Of Tuor and his coming to Gondolin

Yet Doom is strong, and the shadow of the Enemy lengthens; and I am diminished, until in Middle-earth I am become now no more than a secret whisper. The waters that run westward wither, and their springs are poisoned, and my power withdraws from the land; for Elves and Men grow blind and deaf to me because of the might of Melkor.

Those are some interesting points, Hookbill, I will try to answer them:

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.

I agree; there came a point when he stopped being the mightiest after Eru. He himself recognised this when he became prisoner of Manwe:

Originally Posted by Melkor Morgoth, Myths Transformed, HoME X

Melkor must be made far more powerful in original nature (cf. 'Finrod and Andreth'). The greatest power under Eru (sc. the greatest created power). (He was to make/ devise / begin; Manwe (a little less great) was to improve, carry out, complete.)

Later, he must not be able to be controlled or 'chained' by all the Valar combined. Note that in the early age of Arda he was alone able to drive the Valar out of Middle-earth into retreat.
...
Manwe at last faces Melkor again, as he has not done since he entered Arda. Both are amazed: Manwe to perceive the decrease in Melkor as a person, Melkor to perceive this also from his own point of view: he has now less personal force than Manwe, and can no longer daunt him with his gaze.

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 think he had much of that, seeing how he became obssessed with total anihilation - same great chapter:

Originally Posted by Notes on motives in the Silmarillion

Hence his endeavour always to break wills and subordinate them to or absorb them into his own will and being, before destroying their bodies. This was sheer nihilism, and negation its one ultimate object: Morgoth would no doubt, if he had been victorious, have ultimately destroyed even his own 'creatures', such as the Orcs, when they had served his sole purpose in using them: the destruction of Elves and Men.
...
even left alone he could only have gone raging on till all was levelled again into a formless chaos
...
Sauron had never reached this stage of nihilistic madness. He did not object to the existence of the world...

but what turned his heart to the darkness?

I remember this curious comment concerning Jules Vernes' captain Nemo: he became a demon because he was not allowed to be an angel.