I think we need more of this. Perhaps less useful for those of non D&D derived systems, it still presents an excellently detailed scenerio that can be adapted. Details of the tactics should be translatable to other systems,and the function of some of the items deduced. That Pathfinder's rule's are available online is a great help:
A good treatment of the subject - Faith as mentioned seems to be a fairly common mechanism. The need for physical avatars to act is a good one.
This chasing of faith has one side effect - it essentially predisposes gods to be selfish and capitalistic in nature, which somewhat precludes truly 'good' gods. Those gods which hold to 'good' principles will , barring some major change in humanity, be at a distinct disadvantages to those gods who will do anything they can to obtain Faith.
A memorable location, though there are some nit-picky logistical details that spring out at me. I'm not sure how there could be enough fuel to burn for two years, unless it was an exposed coal seam or a tire dump :)
I'm also curious on what the goblins eat that they would thrive in such a region, where no live trees are. Did the massive deposits of ash provide fertile soil?
The fact that they have any desire to obtain ore implies they have a good source of some type of fuel, for carting firewood to smelt ore would be rather expensive. This points to the coal seam as being possible.