There's a lot going on here that works. There are a few things that don't. Let's dish.
One of the things Dwarves do best is getting big and strong without spending a lot of twilight.
Book of Mazarbul is great for hand extension. Remember the "rule of four" regarding card drawing.
Delving is helpful early in the game, but less so as the game progresses (once the Book is in play).
Dwarves are bad against corruption attempts. A
Sam, Son of Hamfast splash is almost necessary. You can either use his gametext to peel of burdens, or sacrifice Frodo (giving the ring to Sam) if the burdens start to add up.
Where are
Dwarven Bracers?
Gimli's Helm? I would consider dropping the two copies of
Dwarf Guard for a little more Frodo protection.
Bounder, perhaps? Maybe a single
Thrarin, Dwarven Speedbump to throw in front of the Balrog?
You'll have to decide if
Battle Fury and
Cleaving Blow are your best calls. I prefer
Axe Strike personally.
A few notes on the Shadow side: Four copies of
Under the Watching Eye. I happen to love
Orc Assassin--you might be able to pick off
Sam, Son of Hamfast or
Merry, Friend to Sam. You'll figure out your perfect balance for minions and conditions. I don't think that the possessions are even necessary in the deck. You want your minions to show up, exert-to-wound, then move on. In this regard, perhaps
Orc Soldier is a better [read: cheaper] call than
Orc Hunters.
Morgul Slayer has almost no chance of adding a wound in the regroup phase.
Dwarrowdelf Chamber is a good idea for a site four. Most decks don't run Gimli, so you are getting two additional exertions. The damage bonus doesn't really do too much for you with your hardy companions anyways.
Anduin Wilderland is a fine choice for site 7 without any copies of
Orc Bowmen. When the time comes, you might want to consider
Anduin Confluence.
Elrond, Herald to Gil-Galad (with
Vilya!) can be a killer, and
Secret Sentinels is brutal.
Just a few thoughts. Keep posting!
-wtk