Wow, lots of good ideas all around. This game's gonna rock. I really like the Rings of Power idea and the multiple story lines from both Mirkwood and Lorien. So maybe combining little bits of them would fill in some of the plot-holes. (Although, knowing me I'll probably add three for every one I try to fill in .
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We could follow two scouting parties, one from Lothlorien, which is trying to find a lost patrol after the second assault on Lorien, and one from Mirkwood, which has been splintered, some of the elves being lured to Dol Guldur by some mysterious force (insert dwarven rings of power here) the other half, which was not effected, following them. Our Lorien scouting party discovers the third wave of orcs, and then has to frantically return to golden wood to warn the other elves. The party is then sent to Thranduil for aid, and runs into the Mirkwood patrol, which is battling both the fallen elves who were seduced by the rings, with more of the patrol becoming lured every day, and all manner of black creatures from Dol Guldur. The combined party has to hold out long enough for Celeborn and Thranduil to meet up and destroy Dol Guldur.
And about the magic is complicated thing- Tolkien never gives us a real discription of the how's or why's or to what extent's of any of the rings of power. So this means we can improvise and give whatever (reasonable) powers to the fallen dwarven rings we want. Maybe they're held by fallen elves who corrupt others. Maybe they're born by orcs. Maybe they're just sitting in Dol Guldur putting out a siren call. I dunno. But we can fill in whatever we need to make the plot work.