I think the ending was perfect, .....
Agree!
......I wonder if [Ygerna] she is something MUCH more than what we believe she is... Demon of Lies itself perhaps?
I find you came with a nice theory

....
The Divine couldn't kill that little child, the "Demon of Lies" (Janus) who summoned a Demon in the personality of a human!!
And "what" do we know about that "little child" after the ending of Divine Divinity?
Well, the Divine take that little child and named it "Damian".
Maybe the Demon of Lies was NOT totally killed? And so he, Janus, transformed into a human, Ygerna, ... like he could transform into a monstrous beast!
Maybe?
It was also Ygerna who awakened all the bad things in Damian. Damian, the summoned child by the Demon of Lies, a new-born Black Ring !!
If I'm wrong, so sorry ... it's just something in my mind ...