Thank you for the help guys, I do appreciate it. Also, sorry it's been awhile since posting, but I've got some info to share, and a few questions about handling Fear/Horror/Madness checks. Also: Wall of Text incoming.
I've decided that I'm going to change up the Darklord a little: A young paladin named Sir Aldeth Novak dreamed of the glory he would receive if he were to slay a dragon. He became obsessed with finding a mighty wyrm to defeat, and began searching through all of his order's lore on known dragons. When he wasn't adventuring with friends, or on a quest for his order, he was pouring over tales of dragon raids, dragons that helped or hindered armies, or possible dragon lair locations. What he discovered was that in a valley in the middle of a mountain range far away, a dragon had been sighted hunting from time to time. Surely it posed a danger to the surrounding villages, so he needed to destroy the beast as quickly as possible. The valley was nearly impossible to reach, and he was now getting older, so he called on some of his friends from his time adventuring to help him on his quest. He convinced them it was a preemptive strike against a dangerous dragon. So determined was he to fulfill his lifelong dream of joining the ranks of dragonslayers, that he saw every obstacle as a challenge to be overcome, instead of a warning from his deity. He became more frustrated with every setback, but also more determined. When he finally scaled the mountains concealing the beast's lair what he discovered shocked him and his party. The valley was full of the skeletal remains of dragons long dead. Torqothdein (dragons must have long, difficult to pronounce names right?) was the guardian of a dragon cemetery, and posed no threat to the surrounding areas. Still, Sir Aldeth was determined, and his party found Torqothdein's lair while the dragon was out hunting. Being a party of (mostly) good aligned adventurers, the wards against evil did not stop them from entering. Inside, Sir Aldeth discovered unhatched eggs the dragon was fostering, and, outraged that his prey wasn't in the lair, destroyed them instead. When Torqothdein returned, he was immediately able to smell the presence of some mortal adventurers, and smashed dragon eggs. Torqothdein flew into a rage and killed all of the intruders except for Sir Aldeth, who finally managed to complete his lifelong desire (despite the loss of his status as a Paladin). Having learned much of dragon lore in his obsession, and being outraged at the loss of his Paladinhood, Sir Aldeth ate Torqothdein's heart in a (blasphemous) ritual that stole the dragon's essence. When the ritual was done, an angel came to Sir Aldeth, and explained that he had also inherited the dragon's duty along with its power, and that if he ever wanted to redeem himself, he would have to guard the dragon graveyard for the rest of his life (which would last another 1,500-2,000 years). Aldeth laughed and looted the valley for everything he could carry. Unfortunately for Sir Aldeth, the dark powers had been watching him as he led his friends to their deaths for his own glory, as he murdered defenceless unhatched (and Lawful Good) dragons, and has he defied his deity's wishes. They took him to Ravenloft, crafted for him a new domain, Balaur, and made him its Darklord.
I think the curse is going to take the form of dragon bones/skeletons being constantly unearthed every few months by farmers or adventurers, maybe even pushing themselves up from the ground from time to time. Basically, Balaur sits on top of a draconic mass grave, and people keep finding bodies. This keeps reminding Aldeth of what he's lost (his Paladin Card), and makes it impossible for him to not feel like he is carrying out Torqothdein's duty unwillingly since he can't leave. Also, everyone in Balur
"knows" dragons died out over a thousand years ago, so no one will ever believe he has killed one, making it impossible for him to experience the glory and admiration he believes is his due as a dragonslayer.
So far I've ran two games. The wolves of the domain have been growing bold lately (because there is a vampire hiding in the deep forest hunting packs and turning some of them). The first game had 3 players make characters, and they fought a pack of wolves (led by a wolf that was also a vampire spawn). They made it to their destination and were hired to escort a carriage to another town.
The carriage driver is a Skeletal Champion disguised with full plate armor and helmet, and the passenger is a Barovian noblewoman, Lady Liliac Sclipire (that happens to also be an afflicted werebat, and possessor of an item that gives her control over the undead bodyguard). When Liliac was young, she came across some literature that was written by Strahd (maybe he's some sort of distant uncle? Doesn't matter much, I'm not planning on using him in my game, just his distant niece). It spoke of some of his (failed) attempts to leave the Demiplane of Dread, and of other planes of existence. Her curiosity led her to seek out more information on her home plane, and how it relates to the Prime Material, Astral, Ethereal, etc. Then Balaur appeared next door to Barovia, and Liliac had to investigate this new domain (after all, how often do new domains pop up?). It should be noted that her search for knowledge of the Demiplane of Dread led her to three things, first was to a werebat nest that she destroyed, but lycanthropy from. Second was to an amulet that controls Marko Harman, her Skeletal Champion bodyguard. Third, to Balaur, a brand new domain.
The second game had 1 player missing and another player show up and make a character. This session is where it started getting interesting. Halfway to the town, they met up with the new player, and as they got within two miles of town, they found some town watch (They call themselves "lamplighters" they're police/investigators/literal lamp lighters after the sun goes down) in a skirmish with a larger group of skeletons. After everyone passed their Fear checks, they charged in and ruined the skeleton's day while the carriage raced into town. After some role playing and getting to know some locals, the next day had the Cleric check the town hall's history records (looking for information on past skeleton/undead attacks). He was able to figure out that everything except the last month was too vague, too imprecise, too bland to be real. On questioning a party member (native of Balaur), he learned that Balaur had a false history, and no one from the domain was likely to have existed before last month (smart players playing smart characters). Unfortunately the party member failed a Madness check (went into a fugue state, and went to his "fake" home). Not realising how bad it could be, the Cleric went to a local barkeep to confirm. The barkeep suffered a Catastrophic Failure, and went to the back. The Cleric followed, and rounded the corner just in time to watch the barkeep commit suicide (prompting a Horror check that made him think running for a few minutes seem like a good idea). The Fighter of the group walked in and also failed his (much easier) roll and became obsessed with it. So now the Cleric hates thinking about the suicide, but the Fighter can't stop obsessing over it (good times

). Anyways, after discussing it with the leader of the local Lamplighters (who made his save), they went to talk to Lady Liliac Sclipire about her undead bodyguard (the Cleric cast detect undead thinking
she was possibly a vampire in the carriage hiding from the sun, and the Skeletal Champion failed his save). After some
very good Diplomacy checks she told the party about the Demiplane of Dread existing on the Ethereal plane instead of the Prime Material, confirmed that Balaur was a new domain, and told them that the mists sometimes created/copied/stole people and places. She didn't know why it happened, and one of the players asked how to defeat the evil mists. She didn't know and asked how someone could defeat the ground they walked on, or time, or fate. She did hire them to investigate a few things that she doesn't have the time or inclination to, and she's looking for the Darklord (whoever and wherever it may be). It may be a necromancer in town, or the local king, or whatever is riling up the wolves, or something else entirely.
That brings me to my main concern. Where do I put my Darklord? He doesn't have to be the king (probably isn't). I have been thinking that he found himself the curator of a museum of the sort that collects all the dragon bones that are going to pop up all over the place, but he might just be a knight in a keep somewhere. I don't know for sure where to put him yet. Also, how did I handle the Horror/Fear/Madness checks? I made a couple of them Madness checks because people were confronted with the fact that their reality, up to that point, was fabricated. I thought that might have been sufficient enough for a Madness check instead of Fear or Horror. Any advice would be appreciated.
Finally: I think I'll start using this thread to keep track of my campaign as it progresses. I'll just leave a post after every session for people to critique or ask questions about. If I need to do that in another thread or on another part of the Forums, that's cool, I can start again.