Were the Valar “demoted” at the end of the Second Age?

[Landroval]

Oh, really?

It would have been much kinder on your part to just give or link to the specific definition of evil instead of expecting me to chase or guess what you had in mind.
1. Morally bad or wrong; wicked: an evil tyrant.
2. Causing ruin, injury, or pain; harmful: the evil effects of a poor diet.
3. Characterized by or indicating future misfortune; ominous: evil omens.
4. Bad or blameworthy by report; infamous: an evil reputation.
5. Characterized by anger or spite; malicious: an evil temper.
1 is a circular definition, it doesnt leave us none the wiser; 2 and 5 are unacceptable since 2 doesnt apply in all cases since something harmful can be good and something pleasant (or constructive) can be bad and 5 can be applied to both good and evil persons (but in itself doesn't define them).

I see. Well it doesn’t get much easier than that.

You can’t start with a hypothesis that is not true and then draw any supportable conclusions from it, relevant to our discussion.

Aren’t we talking about what happened after the Music? Wasn’t Melkor a Vala? Aren’t the Maiar simply lesser Valar? Were they incapable of making mistakes also? What about Melian’s descendants? They had angelic heritage. Could they make mistakes? Where do you draw the line? I draw it immediately under Eru.

This doesn't help at all your previous statement that "If mistakes aren’t part of the theme then no one can make mistakes" - first because Men are not bound by the music and second because new things are continuously introduced by Eru, beyond the initial Themes.

Were there no other options? Shouldn’t they have tried something else?

Again, is it anywhere stated that a better course of action was available? Or that the valar were wrong in dealing this way?

So, according to you, Tolkien went straight from eagle shaped clouds to actual eagles without any explanation.

So, according to you, Manwe puffed up numerous eagle-shaped clouds for the heck of it?

Originally Posted by HoME V, The Fall of Numenor

There follows a 'scenario' in which Sorontur King of Eagles is sent by Manwe, and Sorontur flying against the sun casts a great shadow on the ground. It was then that Elendil spoke the phrase ("Behold, the eagles of the Lord of the West are coming with threat to Numenor ")

On the other hand they must have been awfully big since their wings were “grasping the sky”

Thorondor alone had a wing span of 30 fathoms.

I also wonder why the Valar would hold any cousels if the decision would be made by Eru anyway.

Eru gave his plan in the Ainulindale and the valar carried it out; after they entered Ea, the valar had little if any means of contacting Eru by themselves (save Manwe).

For Manwe was free from evil and could not comprehend it

This part is clearly addressed in Osanwe kenta:
Manwe could not by duress attempt to compel Melkor to reveal his thought and purposes, or (if he used words) to speak the truth. If he spoke and said: this is true, he must be believed until proved false; if he said: this I will do, as you bid, he must be allowed the opportunity to fulfill his promise.
Of the risks of doing otherwise, I reffered to previously.

If releasing Melkor was a good idea, then wasn’t capturing him in the first place a bad idea?

That action was sanctioned by Eru, according to the Silmarillion.

Please don’t put words in my mouth, Landroval.

I am not; you are arguing against yourself when you say we should look at the greater picture since the quote you gave concerning Manwe in Myths Transformed is part of a cohort of other profound changes, concerning which Christopher said:""It seems to me that he was devising – from within it – a fearful weapon against his own creation". Not to mention that in the same text, Manwe is praised as the wisest being.

Wouldn’t it be easier for Men to learn a lesson if they knew what that lesson was?

The lesson was quite easy for most of those who were oppressed by the numenoreans; there is a God .

But why can’t we judge the results of actions that were taken?

And by what standards can we judge them? We don't have their knowledge, nor their wisdom. If you argue that the valar should resort only to actions that have immediate positive results, we will have to agree to disagree. Most, if not all, of us have to take difficult decisions that affect us or the others; those decisions shouldn't be avoided just because their immediate/visible result is not positive; it is the same with the mandate of the valar.