He just does not sit right with me - although I can't explain why. I think b/c his only real attk is posession - which can make a session pretty boring for a player.
Any suggestions for replacements? I was thinking "cerebrus " but they already will have fought the 3 headed Soltengrebe.
Your players should probably have Protection From Evil up which should make that nearly impossible, and I think Staunton's Journal hints at what they'll face down there. Also I've always had it that possessed/dominated players just run themselves with some instruction from me.
He was a fun and tough encounter for my party. They didn't go in there with Protection From Evil up, so the Barbarian got dominated. He also started summoning Shadows as soon as he heard the first trap go off, so he had plenty of allies by the time the party showed up.
Also using Telekensis (I think it was?) to push the party into the Slime was rather effective.
Otherwise, you could have Staunton rise as a Graveknight and have him be the final encounter? I think the book suggests this may happen a few times.
If you have time and the means, take a look at Demons Revisited for extra ideas and feats for shadow demons (and all other kinds). That book helped me rebuild many a demon to help strike fear into my players.
As printed it was a long and drawn out fight for my group. A circle kept out all the shadows and prevented possession. Or when the PCs messed up and moved out of the circle they were saved by high dice.