Attending a tournament: 550 points minimal for heroes in a 700 points army.

I'm thinking of fielding a totally non competitive fluff army: Balrog, dragon, 10 goblins shielded.

What would you use to defeat the monsters, or would you simply try to kill 6 goblins that I'll be trying to tuck away from battle?

How stupid is this army to be used at a tournament?

Also, if you can be bothered to answer, what would you field in a tournament such as specified in points? To give me ideas since I'm not a regular player.

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My Lotr backlog: 305/952[][][][][][][][][][]32% completed
Painting Lineup: Mumakil x2, Rohan Heroes x8, Haradrim, SKoDA

I think I would take a lot of wraiths against this list; as you say, kill goblins and sap will and courage on the big things and run away until they run away. Quite an interesting idea with a big amount spent on heroes. Forces of good, however may have trouble unless they bring some hard hitting heroes and immobilise or similar. Just keep those goblins hidden.

Cavalry will wreck you. You will wreck them too with hurl, but you won't be able to get them all and then they will hunt down your goblins and kill them and you will lose. You can stay with the goblins and corner camp by the edge of the board, but the enemy will play the objective and you will lose. You can escort the goblins around the board with you, but you will be surrounded and they will die and you will lose.

To put it simply, to beat you, it is necessary to ignore the big scary monsters and kill the goblins, which shouldn't be hard as you've got no shooting and nothing that moves faster than 6'.
If you were playing to the death however, not the scenario, but to last man standing, then anyone would be hard pressed to beat you unless they had Isildur and or someone else with the ring and a couple of other heroes. Alternatively, as infinateremains said, chuck a bucket load of wraiths and loads of dudes at them and wait for them to fall.

Thanks for the input.

An alternate army I'm thinking of running has 8 Castellans plus whatever I decide to use for troops. They have the chance to kill heroes in one shot but I have to watch out for sap will.

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My Lotr backlog: 305/952[][][][][][][][][][]32% completed
Painting Lineup: Mumakil x2, Rohan Heroes x8, Haradrim, SKoDA