Here is a more detailed version of what is supposed to be happening in Episode 3. I see we left the Music out of the outline entirely - no wonder it was confusing! It still needs work, but hopefully this is somewhat helpful.
Episode 3: He Who Arises in Might
Cast: Estel, Elrond, Gilraen, Melkor, Valaraukar, Varda, Ungoliant, Ilúvatar (voice)
Estel learns the origin story of the most powerful of the Valar, and Elrond is left to explain why there is evil in the world.
Frame Setting: Library of Rivendell – Elrond begins Estel’s next lesson. Very little frame setup this time; just a recap of ‘where were we?’ and then we’re off. Elrond explains that this part happens before the Music of the Ainur.
Timeless Halls: We begin with Melkor and Manwë and very few other Ainur in the Timeless Halls. This is while Ilúvatar is still creating the Ainur, so not everyone is ‘born’ yet. As the Ainur are created, they join into small groups and begin singing. Melkor approaches the Valaraukar (Proto-balrogs) and instructs them in how they should sing. They enthusiastically respond to his instruction. Melkor then approaches another group and tries to do the same...but confusion results and they cease singing. Melkor awkwardly leaves. He is clearly frustrated by those who do not think like he does, but sympathetic as the audience should see him as someone whose attempts at conversation at a party have failed.
The Void: When Melkor leaves the Timeless Halls, which are brightly lit (if indistinct in form), he finds himself in a strange dark nothingness. He himself glows faintly, but the light bleeds off of him, blurring his form. He is searching for something, silently.
Timeless Halls: When Melkor returns to the Halls, they should seem bright and loud in comparison to where he just was. The transition is jarring. He sees Varda. She asks him where he was, and he explains that he was looking for something, but he’s not sure what it was. There is something more, he thinks, that Eru is not sharing with the Ainur. Varda tells him that it sounds like he means the Flame Imperishable, and she explains to him what that is – [a light that gives thought substance, or something like that]. Intrigued, Melkor returns to the Void to renew his search more eagerly.
The Void: Melkor meets Ungoliant, the first being he has encountered in this dark blank space. She is intrigued by him, as she has never met another being before. He is somewhat unnerved by her, but explains what it is he is looking for, thinking she might know where it is (or even be hiding it). She is *very* interested in his description, and expresses hunger for this Flame he speaks of. It is clear she does not have it, and he flees from her, back towards the Timeless Halls.
Frame: At the end of the lesson, Estel is quiet, pensive, disturbed. He returns home to Gilraen, who notices the change in his demeanor and asks the reason for it. When he tells her, she is visibly displeased.
[Gilraen is standing at the gate to Imladris, looking out at the very road that brought her and Estel to the Last Homely House. Elrond approaches, sensing her disquiet. Gilraen confronts him on teaching her son about Melkor, worrying about how that might influence/terrify him. Elrond convinces Gilraen of the importance of understanding how the darkness takes its victims. It is the lack of knowledge and wisdom that lead the Numenoreans to their fall.] (Feel free to adapt this conflict).
Estel returns to the Library for his next lesson. Elrond brings up whatever needs to be said after the conversation with Gilraen, and then gets into the story.
Timeless Halls: Melkor returns from the Void. In his conversation with Varda, he is passionate about his desire to make things, perhaps even describing them. When Varda expresses agreement with him, Melkor is elated, takes her hand, asking her to return to the Void with him to find the Flame Imperishable. She retreats from him, insisting that the Flame Imperishable is not in the Void, but it is with Iluvatar. When Melkor says that Iluvatar is taking no thought for the Void, Varda sees through him, sees his pride.
[The Music happens here – not a ‘redo’ of the whole thing, but whatever key Melkor-perspective moments we need. We can perhaps cut from Varda and Melkor’s conversation, to the call to assemble for the Music, and then an overall image of the Music filling the Timeless Halls.]
We get the aftermath of the Vision, when Ilúvatar says ‘Ea!’ and when he tells Melkor that nothing can be done without fitting into his own themes. We definitely get Melkor’s reaction to this statement.
Frame: In Imladris, Estel asks where Melkor is now. Elrond seems somewhat uncomfortable, but answers that he is in the Void, but that he cannot come there.
Void: We cut back to Melkor looking down over Arda from the Void. The camera rotates to show the proto-Balrogs ranged behind Melkor, looking to him for leadership. Melkor tells them to await his call, then descends to Arda by himself. When he arrives in Arda, he begins to walk away from the camera, as the ground becomes dried and cracked beneath his feet. (See the Giants’ Causeway, Northern Ireland).