I have played a couple of scenarios like that. God in the woods from world war cthulhu and the black drop from trail of cthulhu.
Both are excellent adventures and I think the idea has very good potential. The players are faced by a moral dilemma when they discover this. Another nice situation can happen if some baddie decides to kill the cult to unleash the God. It could be easy to mislead the players and create situations where they don't know what's the l'esser evil