I suppose that that could conceivably work; there's nothing expressly saying it wouldn't. Being turned to stone technically leaves characters alive, since it only requires a stone to flesh spell or salve to heal them. Of course, the adventure as written is for 4th level characters, who don't exactly have access to that kind of magic. It also runs the (admittedly distant) possibility that someone could eventually find it and release it.
I have to admit I wondered what's stopping the PCs from attacking the problem at the source, taking hammers and chisels to the stone structures of the ritual ground themselves. What happens if they try that?
I know the DM could just say "The Structures have an incredibly high hardness," but it kind of limits the Players with good ideas or characters with strictures against the idea of body-defacing, or with the idea that "Doing what the monster spawning zealots want is a bad thing."
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<Thread Necromancy>
One of my players suggested destroying the altar in our game last weekend. I had the cleric roll a religion check (and the witch a history check) and told them that while the rangers idea was sound, it probably would not make any difference due to the hallowed ground.
Likewise, I'm pretty sure that an abberation eats and sleeps....
For what it's worth, I would rule that as soon as the hound was turned to stone, it returns to the site again in it's gaseous (smoke?) form.