Now what is wrong with a perfectly normal-shaped Litchi anyway?
I REALLY don't want her to turn into blob, that should belong to Arakune. Why do you think it's interesting if she becomes blob? She'll become an Arakune Mk. II, brings nothing new. At least if we keep the side of she stays human, she will at least bring something new to the table, about how miracle do happen and the same thing didn't happen twice.
Again, what is wrong with a normal Litchi? This is probably why I can't come to Dustloop. Too many people like swordiris. No offense, dude, I think you're a cool guy and all, but anyone hoping horrible things to happen to Litchi, like turning into Arakune Mk. II, just don't sit well in me.
Why do you assume something's "wrong" with it?
It would not only be a pretty damn interesting plot direction, it'd honestly be one of the best ones. Terumi is obviously using her, VERY few people characters are attached to Arakune, and as a writer, personally I would take the chance to do something original and groundbreaking like this in a heartbeat.
1. Arakune finally succumbs and dies.
2. Litchi falls to her own corruption, becoming the "Arakune 2.0" in terms of playstyle - her appearance could differ, however.
2. All of the people who care about LITCHI now feel what she felt towards Arakune and sympathize with her... but far too late. This could include...
3. Linhua! Linhua could take Litchi's staff on her pack and pick up Litchi's style for those who still want that: In other words, nothing (in terms of gameplay) would be lost.
Then, in the end, Bang might use his magic nail to fix Litchi and maybe even save Arakune or something. Who knows? Regardless, it's these kinds of twists that make things interesting, I think.