Can the Balrog be used before going into decline?
There's actually an official ruling on this very point by Days of Wonder in the SWU FAQ:

Q.If my active Race controls the Pentacle, may I move the Balrog, then
enter in Decline?
A.Yes, since the Balrog may be moved &quot;at any point
during [your] turn&quot;.

Some people may not like this ruling very much, but I don't think its existence can be denied!