[Dain]

Well, if it was just orcs in Moria, I think the dwarves would have come back. It was Durin's Bane that kept them out for all those years, not the orcs. Sauron was operating in secrecy for so long, and a balrog is not an easy thing to hide from people. I don't think he was necessarily able to fully control the balrog, but Sauron is definitely more powerful.

About Morgoth, I felt that while he was the mightiest (I'm still not clear whether Manwe was his equal or not--Tolkien says "coeval") to begin with, the fact that he obsessed with power and violence made him more able in those areas than almost all of the other Valar combined, that's all. I mean, it was him against the rest for a long time, and they had trouble subduing him. And if Gandalf was Sauron's equal, why isn't the White Council able to subdue him? I think it's all a matter of what they specialize in, and since Sauron is a master of deception and destruction, he is the most powerful Maia (in ME) in that. I don't think Balrogs are in his league...