The Men with beasts theory would not work. JRT recognized the problems of imterbreeding different species:
"I suppose that actually the chief difficulties I have involved myself in are scientific and biological - which worry me just as much as the theological and metaphysical (though you do not seem to mind them so much). Elves and Men are evidently in biological terms one race, or they could not breed and produce fertile offspring - even as a rare event...".
Letter 153
He had several different conceptions through the years (Elves, Men, Maiar (or a mixture of the three), Beasts or automaton). However he never seems to have come to a firm conclusion, as he wrote at one point 'the origin of Orcs is a matter of debate'.
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Tar-Elenion
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