So after reading the past few pages of this thread I have a better picture of the Loki discussion. I'll post some of my brainstorming here. This is all from a single-player perspective:
1) At its core, what makes FFH fun is the variety in the civs and how differently they play from each other. Unique mechanics like vaults, building in forests, and feasting are just plain fun even if they aren't perfectly balanced.
2) In general, unique mechanics should be kept, and even expanded where they will increase fun and replayability.
3) Just because something doesn't work in multiplayer doesn't mean it should be nerfed out of the single-player experience. Multiplayer is a totally different animal and is fun in a different way from single player.
4) I personally don't mind the occasional single-player game going totally borked because Bals overextended or grew too fast. If it gets messed up to the point where it's not fun, just restart... the cost of restarting a single player game is a lot lower than MP. In MNAI, AI players get eliminated all the time and it's not like the Balseraph problem happens in every game. I personally like my games to have some variety and unpredictability.
5) Loki is a wonderfully unique thing. Balseraphs are the culture war/randomness civ, and we should explore ways to make these aspects a core part of Balseraph gameplay. Loki's already a nonissue in multiplayer and there are plenty of reasons to play Bals in MP without him (puppets, starting tech, leader with 3 traits, good melee line).
6) Right now, it seems like Disrupt is either too strong or too weak--if the target city has no culture you get it for free, and if it has any stable culture Disrupt basically does nothing except cost you micro time. We should explore mechanics that make Disrupt a core part of Balseraph gameplay, throughout the game.
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I think Loki should still have something to do with flipping cities. It's an alternate form of warfare and a way to take over new territory. One idea mentioned above that might work is to give Disrupt a casting cost of 100-200g if the culture is zero, so that prevents Bals from stealing large numbers of cities early. You basically have to sacrifice a couple of early techs in order to take over a city.
Another idea would be to give Loki a scaling culture boost/drain based on game era, and not let Disrupt steal the city by itself. Someone above mentioned weakening a city's cultural defenses and using your own nearby city to cause a natural flip. So the enemy could have a medium-strength culture city, and Balseraph builds a new settlement nearby. Loki builds up the new city's culture to 3-4 rings, and then moves to the enemy target and starts draining culture. In a way he would act like a reusable artist bomb. But this strategy needs to have some teeth; it needs to be somewhat competitive with just building a stack of freak-->swordsmen and just sacking the city... maybe since Loki's never used in MP anyway, change him so that the subtle culture flip strategy doesn't incur diplomatic penalties with the AI. It would be like fighting an undeclared war. Also make it that Loki can be attacked at any time, but that a war dec still allows him to enter cities?
Also, what if we gave Disrupt a counter? Like, you have to land 5 successful Disrupts in a row in order to flip a city? That would still give you the ability to steal cities, but you would have far fewer of them. AI players would have time to get culture producers built once Loki is on the prowl, etc.
Another idea: What if we changed the city stealing to a new spell, and turned it into a promotion like the Metamagic 3 staff? Like, once he casts the "Steal City" spell, he loses the promotion and has to rebuy it. We could call it "impersonate mayor" or something... Loki uses a portion of his life force to impersonate the city governor, but he can only do that a limited number of times. Because of how the XP scaling works, you'd only be able to use Disrupt a limited number of times before the XP cost becomes prohibitive. And you'd be forgoing other (potentially) useful promotions.