This is a fairly old topic, but my idea seems relevant to this, so I thought I'd post it here.
Related to the above concerns regarding Elven Wood and the importance of trees to stealth units (which is very important to the faction), I have been toying with this idea, though I'm not aware of its feasibility.
Instead of being an active terrain-changing ability, it's passive and long term (and could function as Lothlorien's faction spell if that's not already been conceived).
The idea is simple in its concept: every X amount of time (5 minutes sounds good, but I'm not a game-balancer), each tree present in the map (maybe could include allied Mallorn Trees? and Huorns? And Ent Moots?) spawns another tree within Y radius.
This reforestation would be an excellent counter to devastation and other abilities that remove trees and steadily shape the terrain in Lothlorien's favor. This may necessitate the removal of the armor bonus for balancing purposes, but Lorien never really had emphasis on armor and more on stealth and guerrilla warfare.
While I personally don't think it fits as well with Imladris as it does with Lorien, this concept would be of immense benefit to the Dunedain of that faction if the ET decides to keep this ability there.
Let me know what you guys think.
EDIT: I quickly realized that this essentially has a doubling effect on the forests and that could get out of hand very, very quickly.
So here's my revised proposal: limit the tree growth to center around Mallorn Trees, Huorns, and Ent Moots with a new tree spawning about every three minutes.
I also came up with an interesting effect that could apply to the tree growth around the Mallorns, but it could likely be OP, so let me know.
The otherwise normal trees around the Mallorns share in the Mallorn's Melian effects, though perhaps with reduced radii/effects.