First, I corrected all the typos I could find in the files I'd hurriedly uploaded before heading out of town: the one-page format and the word document, now with added tavern patrons.
The Star of the Dungeon
Whether the dungeon turns out fun for your group or a flop, it was built around the idea of the pale beast thing chained to a course, its scraping warning of its approach. This is what I meant by thinking up situations and then building a dungeon around them here.
I probably shouldn't have named the thing, because it seems to make it more tangible and less frightening. I would have it be intelligent and squeeze as much tension out of it as possible; let players hear the strange scraping sound far away, nearer, nearer, and a flash of white as it passes a corridor intersection. Later, have it walk very slowly holding the chain so as to make no noise. Maybe even let the players see it doing this (from behind, from the side) so they are creeped out by the idea that a) its smart and b) they can't count on the noise giving it away any more.
I wanted to leave the whole situation fruitfully ambiguous: is John a kook whose secret digging has gotten him in trouble, a weird serial killer, a combination of the two? The humans with arrows in them in room 3 pushes it toward the killer choice, but that could have been done by the dollfolk, or even the forsaken. If a DM wanted, they could play John as a sympathetic kook that was terrified by the ark in room 8, doesn't know how to ask for help, and thus pushes parties underground.
Tone as Generating Technique
I mentioned early on that I wanted to think in terms of gonzo, creepy and wondrous and then see if I could mash them together. This was actually really helpful. fun and interesting, but . . . insane! Can you imagine writing three dungeons for every one you map and play?
I actually did most of a map in the style of Tony Dowler for my gonzo ideas. The first goofy idea I had was that if there couldn't be giant rats in the dungeon there would be everything like them I could stuff in. That produced the idea of straw rats, beavers, and a capybara. On my map I had a beaver standing next to an underground dam. This damn later turned into the Behemoth.
It was interesting and quite easy for the funny to turn weird-- the stuffed rats became made of meat and filled with victims. I actually can't claim one of the weirdest aspects, the duplicate tavern underground. I had asked my buddy weeks ago "What would you expect under a tavern?" and he said "A well you have to go down and then another tavern with talking frogs." The talking frogs will have to wait for their own dungeon, but the model of the tavern seemed like genius to me, so I used it.
Simulation vs. Mysterious Underworld
If you deconstruct this dungeon, it, like my Coastal Caves, really points to a simulationist struggling with the fact that they know dungeons need variety, wonder, and mystery. I really tried to make a place John Jentilman could have dug with his own hands in ~40 years, sometime uncovering the Ark room. The Behemoth and its dollfolk worshipers are me trying to add the mystery of the underworld (who knows where they came from), but again, the fact that something has been eating the poor, big, grub is indication that my default thinking is realistic.
Early on I did actually trace some dice and place dominoes to see what I would come up with. The dice resulted in too natural a setting, it didn't look like someone had carved them out. The dominoes were too linear, but they did result in a religious room overlooking a chasm that I think was the seed for the undersky.
Oddly, both the beaver dam turning to a Behemoth and the domino dungeon tile turning into a platform overlooking an underground sky came to mind as I was waking from sleep on the same morning.
I wanted to incorporate all the things in T. Foster's suggestion for a session of play. I didn't really get the telegraphed trap in, unless you consider the mud spiral one. I also didn't get magic that changes characters permanently, but as suggested the musical hives in room 8 could fill that role. As a side not, the music that activates the glass vessel isn't meant to be silly, it's just the simplest song I would know, as a non-musician, how to peck out on a keyboard. If your players are musicians you could make the tune more complex/interesting and also have a different tone.
I also wanted to incorporate factions if I could, but by making the Forsaken savage beserkers I broke Alex Schroeder's suggestion for intelligent opposition. If you play through this you might consider forgetting that beserker part, make them more like Lord of the Flies boys, not so much raving mad as merciless, at least someone players could negotiate with. Hmm . . . maybe the Gulo wants something? I know the Behemoth wants something . . . out. And that's one reason I put the amulet of ESP in the dungeon (I have no idea how players might free it though). But maybe the Gulo wants something more than just fresh flesh too . . .
Okay, enough blah, blah, blah from me. Hey, what about my SAGE request, "What did Telecanter get?" you might wonder. I was going to post, but I'll just point you in the direction of the goodies. PatrickWR made this great list of treasure items here. Thanks!