First of all, awesome mod.
I played as Ljosalfar a couple times, and I have some thoughts on Ancient Forests:
Time:
Ancient Forests are ancient, they should take a long time to grow.
Randomly turning forests to ancient forests in 'Leaves lands is a good implementation, but can be spotty and makes it difficult to schedule the workers. One really should be able to measure the aging of forests.
Perhaps a more predicable cottage-like upgrade system ("X turns to ancient forest") would be better? Forests as a whole could be tiered like "Young Forest" -> "Forest" -> "Ancient Forest", with ancient requiring 'Leaves territory and a laborer on tile. This ensures that the city is cultivating and tending the forest so it can grow greater than a un-tended wild one. Perhaps the number of turns needed can have a random component and druids can expidite the process -somewhat-. The game could also randomly plop down "Young Forests" instead of full-grown ones for new forest growth.
Pillaging:
What is ancient majestic forests filled with wonderous creatures to the Fellowship of Leaves, may be prime timber or charcoal, inhabited by pelts filled with reagents to many enemies of the forest. While the treants defending it may be huge, so are the looting possibilities. Allowing military units to pillage ancient forest or workers to chop it for great rewards only makes sense. The infernals might even burn them as a ready-made sacrifice to the hells for a boon. The time taken to grow ancient forests means that destroying them would be true defilement, a more devastating loss than towns to the owner, hence why they are so protective of them.
Balance:
Ancient forests with towns/farms on them were unbalancingly powerful. The ability to add another improvement on top of the bonuses of the forest is what is unbalancing, as the ancient forest by itself is not so great with Grassland + Ancient Forest = 3F 1H. As a result, only the elves have a -huge- incentive to go 'Leaves, whereas other races, while welcome to go 'Leaves for the happy/healthy bonus, don't have incentive to grow forests since they can't build improvements on them, making their use of 'Leaves as a nature religion half-hearted at best. One thing I prefered about FfH1 was that your race didn't so directly determine your strategy. Allow other races to build these other custom forest-improvements you've been talking about. Specializing different parts of the forest is good, but uber-town-forests is too much.
Also, maybe ancient forest bonuses should only be present while 'Leaves is state religion, to prevent freeloaders from upgrading and improving forests only to switch to another religion and keep the bonuses. If they want to switch they can lose the bonuses and gain incentive to chop all that giant timber they've grown.
Bugs?:
I noticed the ancient forest model doesn't behave like Civ4 forests, but rather as Civ4 buildings. This is probably so they won't sink into the ground around roads and improvements. Unfortunately this means they float in mid-air around hills and look repetative in consecutive tiles. It'd probably be tricky coding to get the best of both worlds, but I thought I'd mention it since I don't think anyone else has reported it. I also noticed Bloom can be cast over improvements that don't normally mix with forests, like mines and quarries.