Well, well, well. You never know what direction a wild, sleep deprived idea will fly off in, do you? I've had plenty of out of the fringe physics discussions myself, but in this case I was operating more in the realm of literary analysis (sorry, too many college papers will make you write like that =P). I am definitely not saying that the Myth world operates on "in real life" rules. Case and Point: A disembodied head that can talk.
I like the idea of The Head=Balor because it makes the whole MythTFL story fit together in a nice little loop, "ending" with a satisfying ironic twist. The very first cutscene begins the Myth story with the recovery of the Head. Beginnings are important! The progression of the story shows how the head manipulates the Nine AND the Fallen for its own purposes, whatever those may be. Any one who's read a decent amount (which I'll bet you have) will know that Evil forces are more than willing to betray each other. I doubt Balor's head would have had a problem with disposing of a few Fallen if it served his plans. As for the Nine recognizing him, I don't see why Balor has to have looked the same as Connacht and who knows what being thrown into a hole in reality will do for a Head's cosmetic appearances ;). The best part of this is how it all wraps up. It began with the recovery of a head and ended with a desperate struggle to get rid of one. Coincidence? No way. Is it the same head? Maybe, maybe not, but how perfectly ironic if it is.