The Mortal Soul
Ghilms was a champion of good for most of his life. He made a bad choice, as many mortals do. He bargained with a powerful fiend, the Demon Lord Akxx'N'Kurch, to provide protection for his family and friends long after his passing. In the deal, Akxx'N'Kurch gained a powerful mortal soul. One he would torture and twist until it was ready to be brutally hammered into a horrific weapon of evil.
Ripe for the Reaping
Once Ghilms was suficiently bent and broken, Akxx'N'Kurch took it upon himself to fill a once holy relic, The Chalice of Purity, with Ghilms' pathetic ectoplasm. He then spat a gout of Hellfire into the cup, setting it ablaze. Deep in the bowels of the Blood Forge, he let the soul of Ghlims fuse to the goblet then cast aside the black ichor. The foul smelling fluid stretched out and formed a blade, but most of it landed in the stagnant waters below. The cast-offs that made it to the water became Ghlims'Kurch'En While the rest slowly dripped from the air, back into the cup and is now known as Kurchyynwraize.
The Passing of Kurchyynwraize
The horrible "blade" has seen many hands over the many years since it's forging. None have mastered it's Hellish powers, one by one falling prey to it's trickery and ending up in the hands of another villain over time. Now it has resurfaced in the days of your heroes, in the hands of the opposition. They must capture the blade (No easy task, for sure) and use it to slay the bloated black flame Ghilms'Kurch'En without succumbing to the temptation of it's power (Even harder than getting the blade).
The Power of Kurchyynwraize
... Should be tailored to fit the wielder, maximizing their strengths and minimizing weaknesses, thus making it a very tempting weapon to use. Of course, a flame and darkness motif is advised. Slinging blobs of flaming ichor when swung isn't out of the question either. However, these powers come at a terrible cost, your sanity, and then your soul.
For every soul slain by the blade in your hands, you are doomed to suffer a fate a thousand times worse in the afterlife as you become a valuable peice of demonic currency. The more you kill, the more you will suffer, becoming the fiendish equivalant of a majestic gem rolling down a neverending hill of gold, collecting coins as you go.
Disclaimer: Yeah, it's a super-powerful munchkin-type weapon, but it is meant to be a serious challenge and dilemma for the PCs who should probably be somewhere in the middle ground of the Heaven vs Hell conflict.