Well, after wandering round Cyberspace trying to find out what the heck Cthulhu was... I found out enough to agree that this would be a great idea.
A CoC mod would be brilliant, not least because it would be a great place as a starting point for scenarios.
The only thing I can see as a problem is the unit sprites, as they are hard to make well. And there's no Apolyton expert, since Morgoth left so long ago...
But yeah, a mod like that could have a tremendous amount of atmosphere, and what's more, the AI would be easier to code perhaps, with a more definite goal. A way in which it can realisticly win, rather than just making it a way to delay the human victory.
EDIT: Just thought, its probably possible to rename the Great Library the Necronomicon