Every place has a \"haunted woods\", or field where nobody goes. \"Here be dragons\" is marked, and people shiver. We need a group of powerful monsters like a pack, and are confined to an area not far off a common route. Giants or something? I got it Giant monkeys!
Here is how I propose they are individually rated. Their power since they are designed to strike fear into the masses, should be a two part metric. Either the total amount of players for one largest guild; online at once. Their combined power, mutiplied by two. Alternatively the combined power of half the players online at that time. Which ever being greater.
The idea being to make them hard enough that a group would need to form to kill one. A large, and long battle to kill them all. Also detailed records of their battles should be maintained by the server so it can be posted to the forums, and talked about.
Secondly.)
Also maybe the otherworld (where you die) should take the form of a city (NPCs) in the shape of the tower of babel? I saw a neat tower shaped city in a magazine.