Before getting to the kernel of my feedback, I would firstly like to commend Julio's effort in bringing what looks like a grand-style proposal (my favourite kind of suggestions) into being. It's been a long time since we last had the chance to discuss major concepts on the forum, and interest in the Misty Mountains is gradually surging in the meantime; mine, too, and I have to say that Goblins do manage to intrigue me a great deal. Thus, I would call it a wonderful occasion for presenting ideas on the one remaining faction we're all waiting for so apprehensively.
Let me now cut through further ado and state things in plain fashion: the concept does not convince me, alas. It is not a matter of ingenious dynamics, imaginativeness, or features that I wish were more unique and therefore lived up to the standards of the modification. I take great exception to your design in very conceptual terms. In short, it is the lore and essence of it which I find myself questioning.
(My reasoning addresses, primarily, the very first post. I apologise, if I seem to have missed subsequent developments or changes involving the core of the thread.)
1. I can't really reconcile with the sheer prospect of seeing the Balrog be manipulated and then beguiled into doing a shaman's whatsoever biddings. If that were to be true, it would imply the existence of black magic that might even overwhelm a fallen angel's prowess, to the point of rendering the latter a mere puppet at the service of a cunning puppeteer. A 'dummy-Balrog' I would view as a gross misinterpretation/contradiction to be witnessed in the game, if not an evident rupture in the well-woven fabric of the lore. A clever plan, without the shadow of a doubt, though quite poor and faulted, as for what pertains to lore accuracy.
2. The shaman, per se, is the subject of my second great grievance: however delightful the conception of new heroes could ever feel, I neither see the scope, nor the need, for a sorcerer to carve out a role for himself in an already-busy scenario, which the bustling world of the Misty Mountains already is.
One of my main principles in dealing with
magic, a terribly complicated theme in Tolkien's writings, is 'to give or endow with magic where it is due and possible'. This partly explains why I'm equally reluctant to accept the presence of Lore Masters in the modification, for example; and, being loth to have ulterior magical beings around, does not automatically mean that canons forbid us to toy with obscure passages or make use of our imagination to the fullest, of course, but I don't particularly relish the sight of magic being misused or misplaced. In our case, I deem it quite unbefitting to grant supernatural abilities to Orcs/Goblins, when, in my opinion, the real arcane/otherworldly character lies (should lie) very close to monstrous heroes who, by definition, defy the logic of the mundane and of the ordinary (here bespoken by regular soldiers, troops, commanders, and so forth). A calamitous winged dragon, a fiery demon, and nameless creatures inhabiting the caverns of the underworld, would perfectly fit in the whole 'magic archetype' I talked about, whereas I don't think it would be likewise for mere minions of evil, fouler forces.
Goblins themselves, furthermore, are rarely sung and given honours as an exceptionally gifted race. Most sources tend to portray the opposite, instead: dullness, weak temper, dread of the powerful, and scarce wit. Binding a Maia to one's will, as though being played as a fool, I wherefore believe would be too much of a stretch to work on.
3. I read in previous comments that another underlying goal would be to show in better manners how the infesting legions of Orcs may have interacted with Durin's Bane, inferring that a sort of hierarchy, be it covert or overt, may have existed between the two. Notwithstanding said premise, there appears to be very little of a hierarchical relationship existing within rational boundaries, in the way the current concept has been construed. It bears more resemblance to a subservient bond, at the Balrog's own expense; we could say that, for want of better words, it would be so asymmetrical an exchange, while the lore leans towards a totally different interpretation which sees the demonic entity absolutely dominant, boundless and loose from any rivalling authority across those halls.
Unlike films, the books suggest that Goblins are likely to have cooperated with Morgoth's servant in some ways, although this is never clarified by exhaustive words in any chapter that touches upon the matter. As far as I recall from my latest read, it is wildly improbable that the Balrog would seriously turn into a lethal menace for the other usurpers of the mines. Actually, if you ask me, the entire Moria arc unfolds quite differently from PJ's depiction: the very arrival of the Bane is less situational than that shown on the big screen, and he even participates in the assault that takes place in the Chamber of Records, against the Fellowship (though his true appearance is unveiled a bit later). Moreover, some lines do leave the dilemma open-ended for the reader to wonder: was the Balrog stirred by accident, or did the One Ring being in his immediate vicinity play some kind of role? In any case, deceiving the flaming beast to reap benefits and to ultimately get to control him, I consider as the wrong approach, personally speaking.
4. Unfortunately, the character whom everything gravitates around belongs to that peculiar category of iconic BFME relics that still linger in our game, for the joy of many in the community. So, we're not bound to have to face heroes of the likes of Galadriel, Smaug, or Sauron himself, who never had an established tradition in the series and are therefore extremely apt for change, iterations upon iterations. Conversely, there's a particular reason as to why Gandalf has undergone minimal variation (ability-wise), and the Balrog certainly embodies another fragment of past vestiges, dating back to the very beginning of all.
Sad that, in no way am I trying to shut the door to the slightest eventuality of his concept being overhauled and fairly adapted to 4.0 logics. What I care to point out is that, to me, there is limited room for bolder propositions, and this normally applies when including the aforementioned 'BFME gods' in the equation. As for the topic at issue, I fear the shown concept might interfere excessively and make the deadliest hero in the game less enjoyable to play with, if we take into consideration that the spell could work against who casts it in the first place (should Durin's Bane be out of control), denying, also, the player the possibility of a free, direct access to him (without having to depend on any medium).
5. Just to reconnect with my fourth consideration, there are even other community wishes not to be overlooked. Smaug had been the centre of a multitude of ideas in the last two years; Aulë's own tireless work has permitted the creation of a quite colossal concept, which aims to allow for a wiser use of the dragon, and for a system which would hopefully explore the coexistence between feral selfishness and the wicked cravings that inform the action of all Goblin-realms. Hoping to remember correctly, here one has the genuine feeling that loyalty (better, non-hostility) needs to be won via sacrifice and dear payment, because the general context is exactly one that makes it viable to experiment with neutrality, as a founding trope. Nameless Things, in addition, could, too, make for an amazing field in which to try implementing non-affiliated/faithless creatures, that would more or less function as hazards (the concept will undoubtedly have to be rethought thoroughly). Lastly, I beg to say, this is not at all about pitting proposals against each other, thus hampering or discouraging users from expressing themselves in all liberty; yet, I thought it was right to widen our gaze and look at parallel threads as well, since, at this stage, we should probably gather everything up and start envisaging an organic, coherent, and comprehensive scheme of how the faction is to result in.
Methinks, the Balrog does not need anything of the sort, apart from torching the battlefield bare of enemies, laying waste to the opponent's base, and obliterating whatever defence your opponent throws against him. That is, the epitome of a short-term ultimate spell.
I trust that each of my reflections will be taken as constructively as possible. I won't express myself in favour or against, yet. I still have to wrap my head around the matter