Okay OP, this will take a bit of research but...
Go to your Google search
Enter in... The Alexandrian, Calibrating Your Expectations
Read that article
Then look up something called 3.5 E6, Pathfinder E6, or Pathfinder E8.
[Basically what you're looking for is games that start at Level 1, and cap at Level 6-8]
Hope that helps. :)
The problem is that people are looking for something that combines two completely antithetical themes.
Pathfinder and it's D+D forebears are about wargaming and flashy magic.
Middle Earth has the wargaming part down, but it's style of magic is totally opposite of what's built into the game. When you're playing Middle Earth a balanced Pathfinder group is totally against what you'd fine thematically. the only Pathfinder classes which would really fit in are Rangers, Rogues,and Fighters. None of the others really belong because Middle Earth isn't a setting for spellcasters. The few casters in the setting are singular, epic individuals. Or like Gandalf, hardly cast at all.
but there were a lot of magical items and magical effects that weren't spells.
hell, the party was walking on monty haul mode they had so much magical loot.
Other systems might do things better out of the box. However, it's not all that hard to tweak Pathfinder. The main thing is dealing with Middle-Earth's morality, particularly with regard to magic. All magic comes from the Source, and using it frivalously or selfishly causes a slow slide into madness and, very often, Evil. Conjuration spells all gain the Evil descriptor, as that would be vanity in imitating the Source; many lower-level spells, such as acid splash, would be changed to Transmutation spells that use a material to create the desired effect. Acid splash, for instance, might require a flask of water that contains alkaline or hydrochloric acid.
You can use, mostly without alteration, Barbarian, Bard, Fighter, Fighter, Paladin, and Rogue. Note that Bards and Rangers, and Rogues with spell-like abilities, would be rare as NPCs, because spellcasters are comparatively rare.
True Wizards, as in Gandalf, are aasimar who generally resemble humans or grand elves. They are actually immortal beings made flesh, and benefit from specialized feats, traits, and arcana befitting their nature. They are probably better represented as Sorcerers of the Arcane Bloodline rather than members of the wizard class, as they are charismatic, powerful, and very focused. However, they may multiclass; Gandalf might have a level of bard, Radagast may actually be a druidic Mystic Theurge. Other spellcasters are generally known as magicians, conjurers, sorcerers, or necromancers, although the distinction is not known to most people.
There are no generalist members of the wizard class, only specialists. "Good" wizards choose conjuration as an opposition school.
Sorcerers generally choose the Arcane, Destined, or Fey bloodline, the latter reflecting a connection to entities such as the ents, Bombadil, Goldberry, and the like. There is no Celestial bloodline, as it would be contradictory. Most sorcerers of the Abyssal and Infernal bloodline probably perished in the last days of the First Age, along with most Draconic sorcerers, if there are such things. Sorcerers of the Undead bloodline are often called necromancers; although most serve Sauron directly, as devotees of Morgoth, sorcerers of the undead bloodline tend to be an unruly and independent lot. Although fairly rare, they are still the type of evil spellcaster most likely to be faced by heroes in Middle-Earth.
Clerics and druids are simply a type of magician, in Middle-Earth. Clerics, with their ability to channel energy, are probably devotees of the Valar. Druids are mystics who venerate the Source directly. Paladins are champions of the Valar; it may or may not be a requirement to be a high elf or a human Dundedain descent. Although the most famous paladin of his age, Aragorn is a high level ranger with only one or two levels in the paladin class.
Gandalf is not a PC wizard who started at 1st level and adventured his way up to high level. Gandalf is one of the Maiar and as such is really a minor godling or angel who was sent to Middle Earth to oppose Sauron. He is a Celestial being, more akin to a Solar who has taken the form of a man, not a human who has studied magic. The power Gandalf has is innate and not something he attained. The same is true of the other Istari (Saruman and the other Wizards) and for Sauron himself who was the lieutenant of Morgoth (basically the god of evil).
The problem with using Pathfinder for Middle Earth is that the setting assumptions are off. You can do it, but in order to achieve the feel of the setting and to have it make any sense you will need to take Pathfinder and house rule it so much that it will almost be a new game. I am not aware of anyone who has done this work, but if you do decide to take it on I would be interested in seeing the results.
What you are saying is literally true, BiggDawg. However, Gandalf can be represented as a PC by establishing that he gradually reveals his powers according to the dictates he operates under.
This is interesting:
http://pathfinderd20merp.blogspot.com/
Something else for Middle-Earth's Third Age I thought of: you need a Faded template that takes a powerful creatures and reduces its CR by 2, reflecting that its arrogance and weariness have weakened it after centuries of stagnation. You could also use lower CR monsters and apply the giant template liberally on Medium and Large creatures to create some of ME's big nasties.
Orcs are orcs; uruk-hai are hobgoblins. Half-orcs exist, but they are small in number, and are all elite, classed NPCs in the employ of Saruman, who probably created them through sorcery.