We seem to have gotten away from the original question, but I suppose it has been answered already. Please do not make personal attacks at me for my thoughts or opinions. If you can prove me correct or incorrect, please share. My PERSONAL THOUGHTS, though they can't be proven in any way that I can think of, is the Flame of Anor that Gandalf refers to his Narya, the Ring of Fire. This, IN MY OPINION, is one of the main reasons Gandalf has such an affiliation with fire, flaming pinecones, fireworks, etc. I also believe the ring was what allowed him to withstand the Balrog. "Flame of Udun" could be taken as either synonymous with Balrog or perhaps the Fire of Morgoth(Dark Fire?) that Balrog's wielded as their power. As for the flood argument, I think Sauron could guess where Elrond was. He had a palantir at his disposal, and if he hears a rumor about a magical elven river valley, who does he think could be hiding out there? He knows of Galadriel and Celeborn in Lothlorien, why should Rivendell be any different? As far as I can tell, the argument was based around why the horses appeared in the flood. my answer to this is
"Do not meddle in the affairs of wizards, for they are subtle and quick to anger!"
Leave it alone. It doesn't really affect anything, except your need to be right. Professor Tolkien isn't here to tell you which one is right, and we can only speculate.