Usually I see something like "Let's change useless cards to make them playable!" and then it's off to the races. 
Assuming we're on our own for the time being, what are we legally allowed to use, graphics/text-wise? Like, could we not turn The Eye of Sauron (V) into Smaug (humor me with the picture), since he's not referenced by any Decipher card?
It looks like Question 3 (templates) is a sticking point for many, and some groups have managed to get away with it, but I think we should do it right. Getting hit with a cease-and-desist would be a quick way of ending things.
I think you answered your own question with your last paragraph there, ES. If we want to "do it right" - and I agree that we should - really the only thing we can do at this point is create a very generic cover slip with no lore, and only basic shapes to represent Str, Vit, and Res.
Once Decipher knows we've got our sh*t together, we'll be in a position to ask for permission to use templates. Once we've got Decipher on our side, we'll be able to take things to Tolkien and see about using their IP and representative images.
And yes, a C&D would quickly shut things down, and I don't think many people realize that Decipher and Tolkien both have every right to send us one at any point once we've started things.