"But I have problems in associating Balder the Beautiful, god of harmony, with Balor lord of the hideous Formorians, gods of chaos"
You need to bear in mind that the gods of any one pantheon usually become the demons of the pantheon that supplants them - like the horned god and the Christian devil. I read the whole Formorians vs. the Tuatha da Danaan thang in these terms, as one pantheon supplanting an older one. The similarity between Balder and Balor is solar: Balder's got associations with light, as you rightly point out, and I read Balor's "evil eye", with it's power to blast and burn, as a solar symbol. Also relevant is the Russian/Slavic deity "Byelbog, the White God, the representative of light" (from http://www.sacred-texts.com/neu/srp/srp05.htm ). And speaking of the Christian devil, I wonder, in this context, about the name "Beelzebub".
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