[Aezeal]

Fire Res makes as much sense as Cold Res in the deep ocean (down next to the vents and the undersea volcanoes).

OK this isn't enough justification for me really. Deep sea is in general cold I'd say.

Just as the Dagon is an Atlantian, the Deep Dagon is a Deep One, and Deep Ones have both fire and cold resistance, are amphibious,

this is a justification and dom 3 thematic I guess.. I'd still say that they all shouldn't have that resistance though but ok.

The other idea's fate mentions would be nice to, and thematic but completely different.

You might not find the magic skills unbalancing but since after your post someone else agrees with me you might want to listen anyway. THe skills as such aren't the problem, the skill on that monster are a bit much though.

Chris idea's are nice though I personally would find a balance option with more (probably all) item slots to keep him viable late game. Chris idea about twist fate doesn't make any sense to me and I'd seriously never do that.

My proposition:
Cost 150
Size 6
Hit Points 200
Strength 32
Protection 16 + 2
Attack Skill 8
Defense Skill 8 - 2
Precision 8
Morale 30
Magic Resistance 18
Encumbrance 4
Move 1/6
Age 3000+(5000)
Leadership 80/0/20

Water 1, Earth 1
Amphibious, Fear +0, FireRes 50, ColdRes 50, PoisonRes 100, Darkvision 100

2 hands, head, body, feet, 2 misc

Dominion: 2
New Path Cost: 60
Weapons: swallow, claw


Or lower dominion to 1, new path cost to 80 and hen give him 5 regen (this is obviously a stronger option)