I had an idea for a TOR setting which would be exciting and familiar but also different and freeing with respect to canon. I want to plan a Middle-earth setting where something major (or minor, with major consequences) happened, or didn't happen, which changed the history from TLotR quite drastically. This would be a pretty grim setting, much like the end of the First Age in Beleriand, when Morgoth had almost overrun the whole land and only a few islands of resistance remained, just before the host of the Valar and Noldor came to save the day.
Possible changes:
--The ring was stolen from Bilbo? Maybe Gollum took it back before Gandalf belatedly realized its significance?
--The Blue Istari, rumored to have fallen to the Shadow are back and helped defeat Gondor and Rohan?
--Smaug never died? Maybe Bilbo got burned to a cinder in during the discussion and so the one ring is buried under mounds of treasure under Erebor.
etc.
Either way, the changes to Eriador would be great. In this "history", the south and East are mostly fallen to the Shadow. Gondor has fallen, Rohan has fallen, Perhaps even Lorien. Refugees have flooded the lands North and West, rebuilding once ruined cities and towns and strengthening the remaining areas not yet under the shadow. Everything south of Tharbad and East of the the Anduin is lost. Perhaps there are islands of resistance in the Iron Hills or South West Gondor (Andrast and Anfalas), and the Norther part of Mirkwood fights back with Thranduil and many elven refugees from Lorien). Maybe the Beornings numbers are bolstered with fleeing Rohirrim returning to their ancestral lands. Perhaps also some of the southern or eastern enemies (Haradrim? Dunlendings?) have changed alliances and are fighting back against Sauron. Not sure.
In this setting there could be a quest to actually find the one ring. There could also be a lot of interaction with canon characters and a lot of freedom in the big overarching story. You wouldn't have to make quests that carefully skirt around important places or people.
Anyway, any ideas on what change caused this alternate history and how the land would be different?