Legolas and the Balrog

[obloquy]

I think it's safe to say that nobody knew Durin's Bane was a Balrog. If anyone knew, Gandalf would have known, too. I think it's very probable that his personal attendance to the Fellowship was singular, and he had previously been content to lend confidence to a horde of orcs from the shadows. Recall how he watched the battle of Azanulbizar from Moria's gates, but never actually went onto the battle field, even when the orc army had been routed by the Dwarves. (See Appendix A part III, Durin's Folk) He may have been alerted by Sauron's presence in the Ring, or by Gandalf's presence; though the latter seems less likely since Gandalf seemed unaware of the Balrog until the 'door scene'. Then again, maybe he did sense the Balrog but kept it to himself, which would explain his words: "'A Balrog,' muttered Gandalf. 'Now I understand.'" In any case, the evidence indicates that Durin's Bane had been a mystery to all up until his confrontation with the Fellowship.