Agreed. Heck, in cities where the religion is not the "official" one, we could even have population loss due to massacres (refusal to convert) or cultural loss due to destruction of pagan temples and what not. But that's just crazy me adding to the confusion, I guess
I think this is a good idea, but I have another opinion on how it should shown on the mod. The reason: we already have the period of anarchy to make the transition from non state religion to one.
What would be a good way to show this is to have a little percent (maybe a 5% would be right) of possibilities to fail a conversion on a city where there's no religion, and no state religion has been declared yet. When a conversion is failed (in any case, not only in the pagan one), the city may have a great increase of unhapiness for a few turns ("We don't want to abandon our faith" would be the motto), what can cause civil disorders, with its common effects: no production, culture, and possibilities of destruction of buildings and harming units garrisoned.
Also, the period of anarchy to convert to a state religion should be increased depending of the number of cities that have the chosen religion. So if a minority of believers tries to undertake the goverment, consequent chaos should be greater than if averyone believes in that faith. As long as you can see how much the revolt period will last, you decide if it is worth to do it, or not. I think the AI will understand this, as long as you don't usually see her to make "major changes" in her civics. She adopts a religion if she has just a city converted. But if you give her a bigger transition period, I think she will consider it better. However, a limit can be given; for example, 5 turns.
So, to summarize the pagan issue, this way we have: if Paganism gives a +2

on any city when there's no state religion and no religion is present in the city. If any religion happen to be spreaded "automatically", the +2

is lost. (The city adopts the religion, but the people are still aware of the "new faith"). When a missionary is sent to try a conversion, if he success, then the same effect is give. If he fails, the city gains a +10

(or a given number that probably puts the city in disorder, but a +10

, that is reduced by 1 each turn it's okay I think). When state religion is adopted, we have a period of anarchy (that depends on how many believers the faith it has in the civ). The result of all this modifications should be a reduction of the speed of spreading the religion, and the adoption of state religions, reflecting with reductions of happiness and increasing of unhappiness the effects on the mood of the people who sadly had to live in this periods.
So a long post, but I think this can conclude the debate on paganism!