When considering this, we must remember that when in physical form, both Valar and Maiar can be harmed - once in a physical form, they are almost restricted to the powers of that form. I included Valar above, though it's not really a good example due to the conditions, because of Morgoth, and his epic battle with Fingolfin. In this battle, Fingolfin is able to severely wound the Dark Lord, even if it only on his legs. Another instance of an Ainur being injured in physical form is when Sauron, in wolf form battles with Huan outside his citadel - Sauron is heavily injured and almost killed in the contest - but only in body.
What you must remember is most of Sauron's original power was in the Ring... if it was on his hand, he had the full use of his power - now if the Ring is no longer on his finger, then he no longer has use of his power - this great blow would have limited his abilities ie. to take physical form
It is for these reasons that I think the version portrayed in the films is correct, or at least makes the most sense.
With the Ring on, Sauron has power - if it's removed suddenly, he doesn't. So, though his body could be injured, he'd still be powerful... so really the cutting off of the finger whilst the Ring is on would be the only way to sever his power. Gil-Galad and Elendil, despite being lordly and deft could not have stood up to Sauron in all his strength - Isildur got really, really lucky and hit a finger... the finger with the Ring on it.
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'A thinking tyrant, it seemed to Vetinari, had a much harder job than a ruler raised to power by some idiot system like democracy. At least HE could tell the people he was THEIR fault.'
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