Wow, is this being over thought, in my opinion.
Yes, as a DM you realize that Ahazu is using the energies of the prisoners to ascend to godhood, but this information is not presented to the characters. All they will know is that they need to replace one prisoner with one of equal or greater power. You must also realize that this process has been taking a few centuries and still not complete. In fact, Ahazu has let other prisoners go so you can assume that he is not in a rush.
As for the question of a paladin, or other good and virtuous character, making a deal with a demon being a violation of there oaths you must put it in the proper context. They are not doing this for personnal power or gain. It is possible to look at this not a pact but a negotion or trade, something they had to deal with while in Scuttlecove (aiding one faction to defeat another with neither one being any better.) Shami-Amourae while being a demon lord has been out of the picture for awhile and is not a major player, if you so desire it, and the fact that an entire world hangs in the balance the gods may look the other way. There have been many stories published in D&D where the goodly gods had to join forces with their evil counterparts to save themselves and/or reality from destruction... so its not that big of an issue if you don't want it to be.
If this still isn't satisfactory, then bypass the meeting with Ahazu or the trip to the Well altogether. Depending on the type of PCs you're dealing with, variuos knowledge checks could be employed to establish what the charcters may know about Demogorgon or the planes. Do they know that he has two personalities? Do they know who his current consort is? Maybe she has observed his weakness. What about other sages? Can they go directly to Iggwilv? What about a sage on another plane or in Sigil?
The difficulty to this method will be if the player's can figure out that the dual personalities are so divided that given multiple problems at once, Demogorgon locks up like a computer running Windows 95